State comptroller releases investigative report on town of Unicoi

Sue Guinn Legg • Jun 13, 2019 at 11:39 PM

UNICOI — The state comptroller’s office has released a report on its investigation into a series of allegations against the town of Unicoi.

The comptroller’s office noted “a lack of management oversight that contributed to payroll deficiencies” related to former Town Recorder Mike Housewright’s use of town funds to pay spousal health insurance premiums for himself and another town employee, and the town attorney’s improper inclusion in Unicoi’s state retirement plan.

According to the report, Housewright and Mountain Harvest Kitchen director Lee Manning received discounted rates for their spouses’ insurance totaling $13,318 and $8,344, respectively, that should have been paid at their own expense.

The Unicoi Board of Mayor and Aldermen reviewed the matter in 2018 and voted to extend the town’s payment of Manning’s spousal insurance premiums through the end of that year based on Housewright’s inclusion of the benefit in hiring incentives offered to Manning prior to her employment. And in January the board approved a $5,000 settlement offer from Housewright and to absorb his remaining $8,318 premium payment deficiency in lieu of the legal costs that could have been incurred to pursue the matter further.

The comptroller’s investigation also found the town improperly allowed Town Attorney Lois Shults-Davis to participate in the Tennessee Consolidated Retirement System plan for approximately four years while she was employed as “a contract attorney,” in violation of a provision of the town’s personnel policy restricting the retirement plan to full-time employees.

Shults-Davis was subsequently removed from the plan and, in keeping with a set of alternative recommendations set out by the TCRS, the board voted in June 2018 to make the town attorney a part-time position and to study the cost of extending the retirement plan to all part-time employees.

The comptroller’s report also addressed “management oversight deficiencies related to credit card purchases” that “in some instances were made without itemized receipts to document the goods and/or services purchased.”

According to the report, between July 1, 2017, and Dec. 31, 2018, the town used its credit card account to buy food items including candy, soft drinks, cheese and vegetable trays, crackers, Gatorade, bottled water, green tea and SlimFast.

The report states, “The mayor stated the food purchased was for meeting attendees, employees and special events. Although we noted some food items at the office, we were unable to ascertain whether these purchases were business related or personal in nature.”

Mayor Johnny Lynch told the Johnson City Press on Thursday all of the food items were bought for town employees and members of the public who attend monthly meetings of the Board of Mayor and Aldermen and special events including parades at which candy is thrown to children.

Earlier this year, the board voted to limit use of the town credit card to three individuals and to require all purchases to be approved by the town recorder. He said the town has also stepped up its efforts to keep itemized receipts on file for all card purchases.

Lynch said the board addressed each of the incidents investigated by the comptroller as they were brought to light and credited the investigation to “people reporting things to the comptroller to try get the town in trouble.”

“I’m sure they will do it again. But there was no intent of wrongdoing in any of these things. They were just mistakes that we corrected. And we have moved on,” he said.

Editor’s Note: This story has been revised to state the board has initiated a study of the cost of extending the TCRS plan to all part-time employees. An earlier version incorrectly stated the board had extended the plan to part-time employees.

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