Crossville Chronicle, Crossville, TN

Area News

May 1, 2014

$20K double posting in trustee's office discovered

CROSSVILLE — The Cumberland County audit committee discussed a double posting of $20,622 in the Cumberland County Trustee's office which led to checks being issued in excess of the cash balance by the county finance department.

The committee met last week with state auditors Carl Lowe, Anita Scarlett and Rodney Malin to review the findings in the state audit's Annual Financial Report for Cumberland County.

"The (Cumberland County) trustee's office paid warrants (checks) issued by the General Capital Projects Fund that exceeded the available cash balance on deposit by $20,622. Section 8-11-104(5) Tennessee Code Annotated (TCA) prohibits the trustee from paying a warrant if sufficient funds are not available. This deficiency exists because the trustee erroneously issued two receipts for the same collection in the prior year; and the finance department issued warrants exceeding cash on deposit based upon the trustee's balance, which included the duplicate receipt," the Annual Financial Report (state audit) for 2013 from the State Comptroller's Office states.

The finding was listed as a non-compliance under Government Auditing Standards.

County Trustee Kim Wyatt's response in the audit states, "A direct deposit was erroneously posted twice to the General Capital Projects Fund in November 2011. This created an overstatement of the fund amount and the finance department continued to issue warrants against the fund. (A) deficit occurred when the correction was made to the cash journal on June 30, 2013. (At the close of the fiscal year.)"

During the meeting with the committee and auditors, Wyatt said, "I'm pretty pleased that this was the only finding."

She added that the trustee's office is all on computer now, and has not done hand written financial records on paper since 2011.

State auditors spent several weeks working in the Trustee's office to find the error.

Audit Manager Lowe said that, as of March of this year, the balance was OK and was reconciled with bank statements.

Carmin Lynch, 9th District commissioner, asked, "What's been done to prevent this from happening again?"

Lowe said the statement is reconciled at the end of each month.

"I think that this year's audit shows that correct on everything else (in the trustee's office)," Lowe said.

Lynch asked, "How much is it going to cost us extra for this (audit time)?"

"That's in Nashville right now. It's based on hours, travel and they apply the rate. I don't know the rate, but it was 95 hours plus travel. I'm surprised you have not received the bill yet. I'm not sure where they're at in the process," Lowe said.

Cumberland County Finance Director Nathan Brock said he was not aware of the county receiving the bill yet.

Under findings in the finance director's office, the General Capital Projects Fund had a cash overdraft of $20,622 and a deficit in the unassigned fund balance of $44,622 at June 30, 2013.

The recommendation from auditors was, "The finance department should not issue warrants exceeding cash on deposit with the county trustee and should not make expenditures in excess of available funds.

Brock's response was, "The County Trustee's office presented $65,407 of revenue for the recording of receipts by the finance department on Nov. 11, 2011. The trustee's office presented the same transaction for the recording of receipts again on Nov. 28, 2011, resulting in the same revenue being recorded twice ... On or about June 30, 2013, the trustee's office advised the finance department of the error and requested the reversal of the duplicate transaction. Upon posting this reversal, a cash deficit was created along with a fund balance deficit for the General Capital Projects Fund. Since the event was so late in the fiscal year, there was not an opportunity to present a remedy for the deficit by action of the county commission. The deficit was corrected with budget appropriations in the 2013-'14 fiscal year budget."

The committee took no action.

The audit committee also reviewed other findings in the finance department and county mayor's office, which will be covered in additional stories in the Chronicle.

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