Dozens of Claiborne County employees were not participating in the Tennessee Consolidated Retirement System (TCRS) as required by law, according to an audit just released by the Tennessee Comptroller’s Division of Local Government Audit.
Comptroller auditors found that 52 full-time employees of Claiborne County and six full-time employees of the Highway Department were eligible for participation, but were not included in TCRS. Claiborne County did not comply with the mandatory TCRS membership requirements, which are established by state statute (Title 8, Chapters 34-37, Tennessee Code Annotated). This resulted in a finding of material noncompliance by the auditors, according to a release from the state comptroller’s office.
County officials informed auditors that employees had been given the option to participate in the pension plan, and they were unaware that participation was mandatory.
“Some of these go back 10 years or so,” stated Claiborne County Finance Officer Sam Owens. “Nobody knew (then) it was law to participate.”
All employees are now participating in the retirement system, Owens said.
“We have already fixed the problem,” he said, adding, “It’s not a huge thing, everyone had to join by Oct. 1.”
Due to this issue, auditors were unable to determine if Claiborne County’s pension liability was recorded correctly. This resulted in qualified opinions on the county’s financial statements.
Auditors also wrote two findings that were repeated from last year’s audit report. These findings are related to employees’ accrued leave balances exceeding the maximum provided by the county’s personnel policy, and an inadequate separation of financial duties in four county offices.
The finding related to employees’ accrued leave balances is in regard to comp time issues, Owens said. He explained that the county can’t pay overtime and hours over 40 for full-time employees accumulate as comp time.
“That issue is mainly in the Sheriff’s Office, mainly deputies when they have to go to court,” he said.
Owens said that comp time hours have been reduced by 30-40 percent over the last two years.
“We’re still working on it,” he said.
The inadequate separation of financial duties in four county offices occurred in the offices of County Clerk, Clerk and Master, Register of Deeds and Sheriff, according to the audit report.
The audit finding states, “Officials and employees responsible for maintaining accounting records were also involved in receipting, depositing and/or disbursing funds. Accounting standards provide that internal controls be designed to provide reasonable assurance of the reliability of financial reporting and of the effectiveness and efficiency of operations. This lack of segregation of duties is the result of management’s decisions based on the availability of financial resources and is a significant deficiency in internal controls that increases the risk of unauthorized transactions and management’s failure to correct the deficiency reported in prior-year audit reports.
The auditors recommendation is that officials should segregate duties to the extent possible using available resources.
“County leaders and highway officials must ensure their adherence to state law,” Comptroller Justin P. Wilson said. “I encourage Claiborne County officials to contact the TCRS to create a plan to correct this situation.”
To view the audit online, go to: http://www.comptroller.tn.gov/la/
If you suspect fraud, waste or abuse of public money in Tennessee, call the Comptroller’s toll-free hotline at 800-232-5454, or file a report online at: www.comptroller.tn.gov/hotline.
Reach Marisa Anders at 423-254-5588 or on Twitter @newsgirl88.