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Town of Unicoi, Washington and Unicoi county schools listed in state reports on missing and misused money

Sue Guinn Legg • Oct 3, 2017 at 11:42 PM

The town of Unicoi and Washington and Unicoi county schools are included in two recent state controller’s reports on more than $3.5 million in missing or misused public money.

Released by Tennessee Comptroller Justin Wilson on Tuesday, the reports list and briefly detail cash shortages, thefts and judicial actions pending or recently cleared from the books of county and municipal governments, school and utility districts, housing authorities, nonprofit organizations and other government entities across the state.

Of the three local incidences of misused public money, the Unicoi County school district was among those for which uncollected cash discrepancies have been resolved.

The incident involved a more than $20,000 embezzlement of school funds committed and repaid to the school system in 2010 by a former school system finance director. According to the comptroller’s reports more than $4,000 in restitution for special auditing fees remained on the school system’s books until Sept. 29, 2016, when it was paid in full.

The Town of Unicoi is included in the report for $657 in uncollected funds that were misused for meals for the spouses of town employees and board members at a 2012 Christmas party.

And the Washington County school district is included in the reports for $1,060 in uncollected School Aged Child Care fees that were stolen from a county elementary school during the 2014-2015 school year.

In Unicoi, Town Recorder Mike Housewright said the town has taken action to correct the misuse of funds cited by the comptroller reports since it was first detected in town audit several years ago.

Housewright said he was previously unaware of the incident since it predated his tenure as town recorder but would be consulting the University of Tennessee Municipal Technical Assistance Service on what actions need to be taken to clear the uncollected funds from the town’s books.

Brad Hale, director of finance for Washington County Schools, said the missing school funds were contained in a bag of payments collected from parents with children in the School Aged Child Care program at Ridgeview School that went missing from the school and was reported stolen to law enforcement.

While missing money was never recovered, an internal investigation revealed a program site supervisor who is no longer employed by school system had failed to follow proper procedures for securing the bag.

Since that time, Hale said procedures for securing money have been tightened and the school system is working with state auditors on how to get the uncollected stolen funds off of its books. “We’ll get it taken care of and move forward,” he said.

John English, director of Unicoi County Schools, said the former school system financial director who pleaded guilty and was sentenced for stealing money from the schools, had been paying restitution through the court system for several years.

“That final money was paid and that erased it. It’s finished and all that money is back in school funds now,” English said.

In a press release announcing the new reports, Wilson said the Comptroller’s Office remains committed to uncovering and tracking the theft and misuse of public money.

He reported the state’s 95 counties began the 2015-2016 fiscal year with $832,111 in uncollected cash shortages and during the same fiscal year $2,459,886.84 worth of new shortages were detected.

The counties were able to recover or write off $2,450,533.97 through restitution payments, insurance claims or other means, leaving an unrecovered shortage of $841,464 at the end of the last fiscal year.

According to Wilson, fiscal year 2014-15 began with cash a shortage of $2,713,071. During that year, $650,770 in new shortages were detected and $635,784 was recovered or written-off, leaving an unrecovered shortage of $2,728,057.

“The misuse of public money should be a concern to all of us,” Wilson said in the press release. “Tennesseans expect their leaders and public officials to take steps to prevent fraud, waste and abuse. Our auditors and investigators make frequent recommendations to safeguard public assets. Following these recommendations will help make government work better.”

The state requests anyone who suspects 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.

Email Sue Guinn Legg at [email protected]. Follow her on Twitter @sueleggjcpress. Like her on Facebook at facebook.com/sueleggjcpress.

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