Crossville Chronicle, Crossville, TN

October 16, 2012

Audit: UCDD funds supported lavish lifestyle


CROSSVILLE — Thousands of taxpayer dollars were used to support the lavish lifestyle of the former executive director of the Upper Cumberland Development District, according to a report by the State Comptroller's Division of Investigations. In addition, the board that governs the agency failed to follow sound business and accounting practices, to ensure expenditures were appropriate and to act in the best interest of the district and its goals.

"These types of abuses of the public trust are likely to outrage many citizens who live within the Upper Cumberland Development District boundaries — and rightfully so," Comptroller Justin P. Wilson said. "Every public dollar that's spent for the personal benefit of a government official is one less dollar that can be spent to benefit the people who need government services. I hope and trust that the Upper Cumberland Development District will put safeguards in place to guard against this type of waste and abuse in the future."

The audit focused on the period from Jan. 1, 2010, through Dec. 31, 2011, and found numerous transactions that did not appear to serve a public or governmental purpose. The UCDD was established to promote economic growth and development to serve those in need in the 14-county Upper Cumberland region, which includes Cumberland County. The board of directors includes mayors of counties and cities served by the agency and an industrial representative from each county, a legislator and a state senator.

Among the most serious findings of the audit is how funds were used by former executive director Wendy Askins for an independent living facility for seniors called Living the Dream, which Askins designed and planned. The investigators pursued a trail of improper spending on the project that appeared to primarily benefit Askins and certain members of her family.

Askins personally selected tens of thousands of dollars in upgrades to the main area of the home, which she and her daughter, Anna Askins, occupied by themselves. These living quarters were much more luxurious than the quarters provided to the handful of seniors that lived at the facility. Among the upgrades was more than $6,000 for steam showers for both Askins and her daughter's bathrooms, more than $1,500 for a double-sided fireplace in the home's main living area and nearly $1,000 for a fireplace in her own master bedroom. Decorative fountains were purchased at a cost of more than $7,000 and more than $25,000 was spent on a curved staircase which led to her daughter's upstairs living area in the home. Both Askins and her daughter lived in the main living quarters and paid no rent. Four seniors lived in an attached residential wing.

By last February, the project had a price tag of nearly $1.4 million. The report found Living the Dream, Inc. was funded and subsidized with public resources, which Askins and her former deputy director, Larry Webb, had essentially total control. There were no operational policies and procedures to evaluate appropriateness of transactions and the necessity of board authorization.

The audit discovered Askins paid herself at least $9,569 for her own personal property, including furniture, a television and exercise equipment to be used at Living the Dream. Although the property was not new, Askins paid herself the same amount paid for the items when new. Askins told investigators that some of the items were "as good as new," so she believed it was proper to pay herself the original price.

Also, at least $14,800 was paid for personal property, including furniture and a mower, to various family members of Askins. Askins and Webb also formed a for-profit corporation, LA Management, to provide services primarily to elderly residents of the Upper Cumberland. However, funding for these services was limited and eligible clients were to be chosen from a waiting list. The report states Askins directed Living the Dream residents begin receiving services immediately. LA Management invoices appear to have been prepared by Askins, though neither she nor Webb received any payments from LA Management, the company was allowed to use the Living the Dream address as its corporate address. Investigators said this appeared to be a conflict of interest and recommended the board prohibit management from contracting with companies they own.

Askins transferred $300,000 from UCDD to the Cumberland Regional Development Corporation (CRDC), an umbrella organization that had oversight of housing and the federal Department of Housing and Urban Development activities, on March 24, 2010. Written minutes of a board meeting included discussion and approval of this transfer; however, the audio tape of the meeting included no such discussion or approval. Askins told investigators Webb changed the minutes without her knowledge and was reprimanded. However, Webb told investigators Askins prepared a handwritten note instructing another staff member to alter the minutes. The staff member recalled that in September 2011, she was provided written instructions from Askins of what to add to the minutes of the February 2010 meeting.

Other findings of the audit were that Askins submitted false information to be reimbursed $2,824 spent for catering a political campaign event for former state Rep. Henry Fincher. Askins stated the political event was a "youth event."  Fincher told investigators he knew Askins had paid for the catering, but was not aware she submitted the invoice for reimbursement from UCDD.

Askins claimed and was reimbursed for at least $1,229 for personal purchases. These expenses included fuel for her personal out-of-state travel, as well as the annual fee for her personal credit card. Askins did refund UCDD for improper payments.

Askins endorsed and deposited a $1,356 check specifically donated to support the Meals on Wheels program into the Living the Dream operating account.

Records indicate UCDD employees used district vehicles and fuel cards while on leave status and on weekends, and most UCDD vehicles did not have a district emblem signifying they were publicly funded property.

The audit also found incidents of agency funds being used for expensive meals, alcohol and entertainment, including $6,300 for a catered meal and rental of a local winery to accommodate 140 guests for the 2010 annual meeting. UCDD also paid to have some vehicles "detailed" at a cost of $70 each. Askins also used a UCDD check to purchase a $2,000 3-D capable computer and $99 for 3-D glasses.

Askins incurred more than $600 in charges for premium texts, music downloads and "ring back" tones in 2011 for her district-provided cell phone. When Askins and her daughter left employment of the district, they did not return their cell phones. The district has 45 cell phones provided to employees that cost $66,213 in 2011.

The agency also failed to provide adequate documentation for many charges to the agency credit card. In many cases, the receipt showing itemized restaurant charges was not included in agency record, only the non-itemized, signed charge slip.

Investigators attribute the magnitude of such waste and abuse to the fact Askins and Webb had unfettered discretion to spend public funds on a far-too-wide range of items and that board members were not providing adequate oversight to protect the public's interests.

"Even though the board may not be directly to blame for such rampant misuses of public funds, it was inherent in their fiduciary responsibilities to supervise Wendy Askins, the Living the Dream project, and to ensure that all development district funds were spent entirely for the benefit of those who are served by the district," said L. Rene Brison, assistant director of investigations for the Comptroller's office.

Askins and Webb were placed on administrative leave in February, and Askins resigned March 20, prior to completion of an internal investigation by UCDD.

District Attorney Randy York has previously cited a possible conflict of interest within his office and asked for a special prosecutor to be assigned. Knox County District Attorney Randy Nichols was put in charge of that probe and the audit will be forwarded to his office for review.