Comptroller’s Office Says Safeguards In Place

The Tennessee Comptroller’s Office says the Jackson County Commission does have some authority for oversight of county offices.

Director of Communications John Dunn says there are built in safeguards that can be used to prevent fraud and abuse.

This as officials in Jackson County express frustration with financial irregularities in the clerk’s office. Dunn said there are steps county commissions can take to ensure oversight to problem offices.

“The county commission typically has an audit committee,” Dunn said. “Certainly Jackson County has an audit committee. That’s made up of county commissioners who have a responsibility to make sure the county officials are correcting weaknesses and deficiencies in their offices.”

Former Jackson County Clerk Amanda Stafford pleaded guilty last week to two counts of theft over $2,500 dollars. A Tennessee Comptroller’s report released the same day showed Stafford had misappropriated at least $25,000 dollars in county funds.

Dunn pointed to the Comptroller’s annual audit of Jackson County’s financial documents for the year ending June 30, 2018 as a sign that there were problems with the County Clerk’s office. On the summary page of that report, it is noted that the Office of County Clerk did not deposit funds within three days of collection and did not review its software audit logs.

Dunn said he believes this is where an Audit Committee could be a useful oversight tool.

“When an county commissioner, for example, sees a finding on a county clerk’s office on the annual audit report,” Dunn said, “the county audit committee should be making sure that, A) That finding is being corrected. That B) That county officer has put in place a corrective action plan to establish clearly how long it’s going to take to address that problem. Really, that Audit Committee is a very important oversight role that the County Commission can have over those county officials.”

Within the $25,000 dollars misappropriated by Stafford, the Comptroller’s investigation found that over $10,000 dollars of cash collections was diverted for her personal use  by withholding collections from deposit in the clerk’s bank account. Also, during a surprise cash count performed by Comptroller auditors found bank deposits totaling $37,462 dollars over eight days were missing. The report said Stafford could not explain where the missing funds were.

Dunn said one way to prevent money going missing is to ensure there are multiple people handling the funds. He said that’s one way an office can provide oversight to itself.

“The biggest thing that needs to be done in any county office is to establish what are called internal controls,” Dunn said. “Those are basically checks and balances for the processes that unfold in that office. So, if an office, for example, collects cash, there should be more than one person involved in that process. There needs to be oversight. Someone looking over that person’s shoulder to make sure they are doing the right thing. Those internal controls, those checks and balances, should be documented so it’s very clear on what that process is that the county office will follow. Then, indeed, those practices need to be upheld and the internal controls need to be put in place for every single transaction on every day of the week.”

Dunn said the Comptroller’s Office can provide some oversight, as well. One of its basic functions are to perform yearly audits.

“Our office has the annual responsibility to audit the county governments on an annual basis,” Dunn said. “Those audits are typically a financial audit. We look to make sure that the financial statements are presented fairly and accurately look to make sure that internal controls, those checks and balances, are existing in the county offices and are being followed. When we see problems there or weaknesses, we report those issues as findings in the annual audit report.”

In addition to the annual audits, the Comptroller also has an investigative arm. It was the Division of Investigation that help secure Stafford’s conviction.

“That division is really charged with looking for fraud, waste, and abuse,” Dunn said. “Digging deeper when there are indications of inappropriate activity, and then reporting that information to the public and the district attorney’s offices for possible prosecution.”

Dunn said that, for now, the County Clerk’s office would not be receiving any extra scrutiny from the Comptroller’s office. Deputy County Clerk Brandon Stafford assumed the duties of that office upon the former clerk’s resignation last month. The County Clerk position is up for election on the August 6 ballot.