The Comptroller of the Treasury released its Comprehensive Annual Financial Report for Blount County on Monday, Dec. 20, and three findings were noted that required the county and the school system to take corrective action.
In regards to the offices of county mayor and purchasing department, the report noted that the Tennessee Department of Transportation had questioned costs of $45,492 related to a construction contract for work at the Little River Railroad Museum in Townsend.
In October, Blount County commissioners voted to refer to the Budget Committee an item regarding refunding the $45,492 in Federal grant money back to the Tennessee Department of Transportation.
For more than a year, TDOT has asserted that the county was liable for the Federal grant funds because state procedures weren’t followed in regards to a building constructed by Don Headrick Construction at the Little River Railroad Museum in Townsend. TDOT was holding $140,000 in federal funds pending repayment of the $44,000, said Steve Jennings, county finance director, said.
In October, county attorney Craig Garrett told commissioners that Jennings had worked with TDOT and negotiated the figure down to $36,000. TDOT said what the county did wrong was allow Headrick, who won the bid, to use materials purchased tax-free by the non-profit Little River Railroad Museum because the tax-free purchase was not included in his bid.
Garrett said this was a technical violation that cost the taxpayers nothing so it makes no sense to force the taxpayers to reimburse the federal funds.
In October Jennings told the Blount County Commission that it was the county’s position that the taxpayers were not harmed and that any money saved went to the federal taxpayers and not to Don Headrick Construction.
Jennings said on Monday that the matter was in the hands of the county attorney now. “He has sent a letter to TDOT Compliance Monitoring, and I don’t believe we’ve gotten a response, but commissioners are the only ones who can deal with that,” he said.
The second item is in regards to Federal Child Nutrition Cluster Grant Funds used when Blount County Schools food service director Dr. Margie Carico purchased an oven for Eagleton Middle School in the 2009-10 academic year.
Blount County Schools director Rob Britt said Carico went by the state bid procedure to purchase the oven, but did not check the date on the bid. “They expire after a while and apparently you’ve got to go on the most recent bid. You can’t purchase something off an old bid,” he said. “She just assumed it was still good. That is my understanding of how it came down.”
Britt said the state auditor told the system they are not the only ones who had an issue with the bidding process. “It wasn’t a major finding, and they said we needed to take care of it and be sure we always purchase things off the most current bids,” he said.
The third item highlighted by the Comptroller’s Office was regarding money the county loaned itself to build Phase I of the Blount County Animal Center in Eagleton on Currie Avenue.
Jennings said that in April of 2007, the county commission approved an inter-fund capital outlay from the Debt Service Fund to the Capital Projects Fund in the amount of $350,000. “That was the original seed money to start the shelter. In April of 2007, the resolution stated it was to be repaid by donations and through excess earnings of the shelter.”
The finance director said that with the transition between former finance director Dave Bennett and himself, that loan did not get repaid. “It is a loan from one pocket to another between Debt Service Fund to the Capital Projects Fund,” he said. “My corrective action was that I was going to apply for a three-year extension to try to raise the donations and repay it as per the original resolution. The only other alternative is to pay for it from General Fund Balance back into Debt Service.”
Jennings said that to get a three-year extension the county has pay back four-ninths of the $350,000 -- or $155,552 -- by June 30, 2011. Then the county must pay the rest by April of 2014.
Jennings said the county is in the middle of Phase II for the project now and most donations have been earmarked for Phase II. No money has been set aside to pay next year’s expenses.
“The donations that came in for Phase I were used to construct the current shelter. There have been additional donations but they were earmarked for Phase II construction. There weren’t any donations earmarked to retire the loan so we find ourselves with an inter-fund debt between two funds. Since we didn’t pay it back before 2010, we have to resolve that,” he said