Recently, the Daily Dispatch reported that the Kerr-Tar Council of Governments improperly spent $138,537 in restricted funds from its only checking account, has been directed to repay the funds in short order to the Economic Development Administration, and is assessing member municipalities a per capita $1.39 “tax” (for lack of a better word) to pay back the improperly spent money and “replenish” its bank account with an additional $172,830. Would that we could all misspend $138,537 and get $311,367 as our reward! Is this a great country or what?
On May 6, Danny Wright made this presentation to the Franklin County Commission about the Kerr-Tar Council of Government’s financial predicament. (There are additional videos of the same meeting in which Danny faced incredibly tough questioning from several commissioners.) This 11 minute presentation shows that the situation is much more serious than we in Vance County were led to believe. Mr. Wright never made this presentation in his home gym. Instead, County Manager Jerry Ayscue carried the water for him and painted this as a mere accounting abnormality.
Earlier, Bryan Phol, Chairman, explained the problem was reviewed and no evidence of “intentional wrongdoing” was found. Diane Cox, Interim Executive Director, said, “There was no intentional wrongdoing by the previous director here,” referring to former Executive Director Timmy Baynes, who left in July 2012. Danny Wright, CPA, Board Member, and Chairman of the Finance Committee, said, “Let me say that there was no illegal activity.” Reviewed by whom? What independent legal prosecutorial authority investigated and determined there was no intentional wrongdoing?
Ms. Cox stated, “…there were certain receivables we’d been carrying on books that were not going to come in as projected or were deemed uncollectible. As a result of writing off those receivables…it put us in a negative cash flow. We utilized one checking account for our general fund. There were other funds in the account that are restricted. Because we were in a negative cash flow, we inadvertently used some of those restricted revolving loan funds.” If COG leaders knew that the funds were restricted and knew that they were in a negative cash flow, how could the check writing possibly have been inadvertent? Unless they were convinced this would never be made public, why would COG leaders, with full knowledge that the funds were restricted, authorize the payments, write the checks, and misspend the funds?
At the March 28 COG board meeting, directors learned from their auditor that this “material weakness in internal control” was a repeat finding from the prior year. If COG employees and board members were informed about this in two annual audits, why was it allowed to continue? Why are they still employed or on the board? Where did the wrongly spent money go? Why aren’t those who wrongly authorized and wrote the checks responsible for repaying the money? Why are hard-working citizens in the numerous municipalities expected to pay for the COG’s incompetence and wrongdoing?
Ms. Cox said the council’s problem was like some faced in households throughout the region served, stating, “If you don’t have the money, you have to figure out how.” To what households does she refer? Individuals cannot spend money they do not have.
Danny Wright said, “The council of governments is currently in serious financial difficulty. As a member of the board, I take responsibility for the situation.” He called the misspending “unintentional borrowing.” Unintentional borrowing! We’re not imbeciles. If COG leaders and employees can’t manage to function on the millions of tax dollars poured into it, can’t manage one checking account, and can’t follow the rules, how can they possibly give advice to municipalities? What municipal leaders worth their salt would heed their advice?
Chairman Bryan Phol said, “The COG is statutorily prohibited from borrowing money, and as a result, there is no quicker mechanism for obtaining the funds.” Mugging might be quicker, but begging doesn’t look as sinister. Danny Wright said that the Kerr-Tar council will pay the money back through marginal reductions on member municipality assessments in future years. He stated, “As long as I am on the COG, we will work on that, I assure you.” If the COG cannot borrow money and this assessment is not a loan, how can it be paid back (as Mr. Wright promised)?
Yet to apologize, COG officials have been very anxious to claim that they did nothing wrong or illegal. It is likely that this never would have made the paper had the COG not needed more of our hard-earned money. Obviously, they rehearsed their innocence claims and got their stories straight before going panhandling in public.
In addition, they seem to be saying that because they deliver the goods (in this case, other people’s tax dollars), they should be given a pass. Truly bad form!
Serious questions remain unanswered. Upon what basis and by whom was the extra replenishment amount of $172,830 determined? What actually happened? Who authorized the payments? Who signed the checks? Where did the money go? Did municipal leaders get the same set of facts that we got in the paper? Will a truly independent audit be done? Will this be criminally investigated? Who should repay the wrongly spent money? Why is the COG in serious financial difficulty? Who is responsible? Are COG employees and directors really going to be held accountable for this and perhaps other wrongdoings? Should the COG even exist?
I can’t speak for citizens of the other COG counties, but we in Vance County are tired of tax dollars disappearing with nothing to show for it. Was this a mistake? I seriously doubt it. Is this the tip of a rather unseemly iceberg? Probably. Do those responsible need to be held accountable for their actions? Certainly. Will they? Perhaps. Federal and State investigations have commenced.
Rusty McMahon
Kittrell, NC
Rusty…..this is a government agency!! Do you really expect more than the same ole’ song & dance? The same thing is happening in Vance County everyday. Look at the “newest/latest” idea that is floating around concerning hiring an asst. county manager. How stupid is this? VERY!!!!! Larger cities/counties within NC don’t have asst. county managers so why does Vance County need it? Simply b/c the ones that are sitting in the high backed chairs aren’t doing what they are supposed to be doing. Talk about eating from the public trough……..until you get some of the “excess weight” out of county govt. Vance County will continue to be the stain on the undergarments of NC!!!!!
Here’s a novel idea…….how about fixing the Joint Ventures so that both the city & county pay fair shares instead of the city paying more than what they should. Too many elected officials have their own pocketbooks/wallets thinking for them instead of the taxpayers. Remember when Mike Inscoe’s daughters profitted from the apartments being built in downtown Henderson? That’s just one example of about 5-10 that I know of personally!!!!! Anyone dare to question the motive if it isn’t financially driven? DIDN’T THINK SO!!!!!
Deception…You beat me to the punch. You are exactly right about the city ignoring the hundreds of thousands of dollars that city residents are overpaying for jointly funded programs. An even larger amount is the $1.8 million owed to the city by the Embassy Foundation. The City of Henderson should be flush with money instead of being in the position we find ourselves in today.
I guess that is what ex-Mayor Young, the Watkins brothers and others meant when they urged support for the “New Direction.”
Mr. McMahon, thank you for taking the time to open this discussion. I intend to focus my comments on the auditor report and actions the COG’s Board of Directors, City Council and County Commissioners.
First a little history, for almost 20 years I performed information technology audits across many different industries inside and outside the US. Alas, I never audited a government or quasi-government body. I also never performed a fraud audit and I never encountered fraudulent activities. Poor management practices yes; enough times to validate the Peter Principle.
The Institute of Internal Auditing defines auditing as: “… [Auditing] helps an organization accomplish its objectives by brining a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.”
In year one a financial audit of COG discovered and reported ineffective controls of accounting and governance processes. The next year a second audit discovered and reported a repeat finding, a continuance of ineffective controls of accounting and governance processes.
To an auditor a repeat finding is gold mine. Copy last year’s workpapers change the dates and the numbers; finding is complete all before lunch. The client writes a big check for basically copy and paste work. As an auditor, I have known of managers, high and low, to be given an opportunity to seek their future goals for a repeat material finding.
I like Danny Wright. I think he is basically a good man with good intentions, and he is smart enough to pass the Certified Internal Auditor and CPA exam in one taking, unlike my two attempts to pass the CIA exam alone. Sitting in the city council’s Peanut Gallery we listened to Mr. Wright’s full explanation of the cause of a repeat audit finding. The week before a non-Board member of the COG made an ‘oh by the way’ explanation to the County Commissioners. Without a question both the city’s and the county’s governing bodies agreed to spend un-budgeted taxpayer’s money to re-fund the COG; whose Board did not implement effective accounting and governance controls when the finding was first reported. In my opinion, and lot about auditing is opinions, the failure of the COG’s Board to implement effective accounting and governance process the first time was copied by the City Council and County Commissioners who failed to implement effective governance processes for handling the next COG like failure.
Why is there any surprise? Who makes up the COG board, other than city and county elected officials from Region K?
This is an open question for Danny Wright.
Mr. Wright, if you were the sole owner of a business and discovered that an employee had cost you $172,830 because of unauthorized expenditures over a two year period, what would you do?
Your choice: 1. Fire the employee. 2. Fire and prosecute the employee. 3. Write a personal check to the company to cover the loss and ask your customers to reimburse you.
Royal rooster, your ire is incorrectly directed. What Mr. Wright has done is blame the workers for following procedures that an audit identified as a cause of a material weakness. The fact the COG’s Board of Directors did not adequately govern the COG’s accounting system and processes after learning of the material weakness in the first audit report is evidence of ineffective governance of a organization. Royal rooster you are firing the wrong people.
Many of the government bodies involved in this boondoggle voted to “make the payment” if there was 100% agreement from the other government bodies involved. Now that Macon has voted not to be a part of the bailout, the push is to go back on their word and make the payment because it’s just a small contribution from Macon that is being withheld. (Good on you Macon!) If the remaining bodies go back on their word, what legal options are available to force them to comply with their original decision?
Now Deborah Brown is showing what many have thought all along….she is playing the RACE CARD like others in the Vance community. Who cares if the lowest paid staff member in the Planning Dept. is Black? If she is so concerned about the lack of African Americans working in County Govt. then she needs to get out in the black community and help some of these struggling children whose dad is either locked up or the mother is spending more time at the casino or bingo than she does reading books and doing homework with her children. STOP TALKING about it…….and BE ABOUT IT!!!! That’s my advice to the commissioner who seems to have always have something to say about race relations. True colors are shining through!!!!! Now you are seeing what she is really about…..Keep looking and you may find out even more!!! or in time she will open her pie-hole and let it slip out in public.
Mr. Bobbitt, you are misinterpreting my comment. Mr. Wright appears to be defending the process by his willingness to “move on” without consequences. My question to him was “tongue in cheek”. Of course, you wouldn’t fire the workers. You make changes to the board, and you DO NOT replace the funds with more tax money.
Since we are now shedding some light upon COG, two questions come to my mind. First, has COG made any “loans” (gifts) to any Henderson merchants in recent years and what is the status of such transactions? Second, if COG went missing, would anyone notice enough to report it missing?
This entire boondoggle sounds like a candidate for a full independent review by Mr. Roy Cooper, the North Carolina Attorney General.
Royal rooster, I did not attend the presentation in Franklin County. I was in attendance of our own Board of Commissioners’ meeting at which only a COG staff member reported basically an oversight. Nothing was said that I recall or have in my notes or in the public documents about a repeat audit finding or a material weakness. I was in attendance of the City Council meeting when Mr. Wright basically explained that it took two back to back audit reports to get the COG’s Board of Directors attention on a material weakness. Mr. Wright gave verbal assurance the COG’s Board of Directors was now performing their role to govern the COG and appropriate controls are in place. Royal rooster I think we are making the same point from different perspectives.
From what I found in the County’s draft budget there is $21,638 for the COG that could be allocated for Gang Assessment, something the Sheriff has repeatedly said he needs.
Deception were you one of the four people attending Wednesday night’s budget meeting? Or did someone tell you about Commissioners Brown’s rant. If you were there or learned of it second hand who did Commissioner Brown mean was the quarterback when she said if the team is not working maybe it’s time to change the quarterback?
Michael,
I wasn’t in attendance but I heard it from someone who was there and also read the article in the Daily Dispatch. From the eyes/ears of the person who was in attendance they took it to mean that it was time to get another warm body in either the County Manager’s cushy seat or some new blood in the Human Resource position. Either way it came across(according to my source) as an arrogant/ignorant statement that SCREAMS along racial lines that the city/county govt. aren’t giving Blacks an equal opportunity when it comes to job postings. Like I posted in the thread about the young blacks running around shooting and killing one another…..she and the other self-proclaimed activists need to get out into the streets of these people and show them a better way or at least lead them to resources that will give them a chance to better themselves. I guess it’s easier to sit around the commissioner’s table and dictate what needs to be done instead of actually getting in the trenches and getting your hands dirty.
It’s long past time to get rid of some of those commissioners and city council members. Get some new names/faces in the seats that don’t mind getting out and doing the dirty work. Less talk and more action!!!!! It was another example of an elected official trying to play the REVERSE RACISM card and it’s becoming quite old at this point.
Deception maybe you were under a rock last year or out of communications with the county when we had the last election for county commissioners. Debora Brown, Terry Garrison, Sleepy, and the new guy had no opposition. What does that tell you? The voters in their districts must support the four? Or the voters in their districts fear opposing the four so they cower from the four?
Left Fielder…..I wasn’t under a rock as you say….I was trying to make some extra $$$ to help your mom’s pay that Rent-A-Center bill for her computer!!! Will you get off your lazy backside and help your mother out with some of her bills. I can’t keep supporting her and pay my bills as well. I know that didn’t have opposition b/c nobody wants to run for a position that they can’t win unless they get the NAACP’s support and the community activists rallying behind them. How about council member Peace-Jenkins…how’s that working out for you? What about council member V.Brown? He goes along with the others b/c as he has said openly in public that he really doesn’t have a clue about what is going on at the meetings. The ones that do have 1/2 a brain are usually swayed one way or another for monetary gain either for themselves or a relative. Case in point….the apartments downtown over the businesses. How much $$$ did that put into M.Inscoe’s and his daughter’s bank accounts? Interesting………..isn’t it!!!! Chew on those facts while you sit out in left field!!!
Wow!!
Deception you went from a coherent cognitive posting to a commissioner’s rant in your next posting.
Wow!!
Left Fielder while you were waiting for a flyball you went from 1/2 a brain to none at all!!! Why do you feel the need to put your “2 cents worth” into every comment I post? Is it b/c you are in bed with one of your local elected officials? Is it b/c you are one of the local elected officials? Something doesn’t seem quite right b/c it seems to “hit home” when I post comments that are TRUE in nature but they are comments that the governing bodies would just as soon prefer that they not be mentioned.
Your county commissioner d.brown is clearly playing the infamous RACE CARD when she bemoans the fact that when asked about the pay scales within the Planning Dept. it was in fact an African American who happens to be the lowest paid employee @ that office. Who gives a rat’s backside? At least he/she has a job unlike many within Vance County. Tell your buddy d.brown to get off her high horse and get into the neighborhoods of Flint Hill, Mobile, Henderson Heights, and Lincoln Heights(just to name a few) and try to do something positive for the young black males/females that reside in those areas. I’d be willing to bet that she has never been into those communities unless it was something they did as a group to see the blight,etc. I am tired of elected officials playing the Reverse Racism Card. Didn’t we get enough of it with the self-proclaimed community activists dale and miles? The Henderson/Vance political landscape needs a vast overhaul and get some of these “lifers” off the governing bodies. Especially those who don’t pay their taxes like Vance County School Board Member E.Cash!!!!! Why is he still allowed to sit on the School Board? Quick answer…………vans that the AA Churches use to bus voters to the polls so that there own are elected. That’s why the NAACP doesn’t want the Voter ID bill b/c this will cut down the # of votes that are cast by people who either aren’t alive or aren’t registered to vote!!!!
So OILF……continue to support the ignorant elected officials who are out for themselves and I will continue to laugh as I drive through that dump you call HOME!!!!! Enjoy the game!!! INTERESTING concepts aren’t they?
The real problem with the Henderson/Vance political landscape seems to be the ARGUMENT culture. The argument culture here seems to urge us to approach the world, and the people in it, in a ADVERSARIAL frame of mind. Arguments here seemingly rest on the assumption that opposition is the best way to get anything done: the best way to discuss community issues is to setup online debates; the best way to cover news is to find anonymous commentators who express the most extreme, polarized views and present them as “both sides”; the best way to settle Henderson/Vance disputes is litigation that pits one party against the other; the best way to begin a post is to attack someone; and the best way to really show you’re REALLY thinking is to criticize. These fallacies of debate are generally found in the younger generation. As a newcomer to the area and as a young man myself, I am utterly distraught at the lack of TRUE leadership on and offline. Many of the great men of history would have accomplished very little if they approached problems in the same manner people of this area persist is reasonable. There is no justification for this perpetual bickering. I can not know what all has transpired here; but I do know that the area comprises of many individuals cemented in there ways. If there is even an inkling of true good will in any of these posts, a TRUE desire to open the eyes of your peers if you will; then do so with a soft tongue or not at all.
– A Distressed Boy
Alan Pitts, I see you created another pseudonym (fake name) for yourself. How many does that make 3 or 4? Deception maybe Alan Pitts and is multiple personalities are using the computers at the public library. Alan Pitts, or legal eagle, or I am evil, or whatever pseudonym your using is one of the only female county commissioner the leader of your, what did you call it, argument culture?
Didn’t someone pay to move Alan and his imaginary friends back north? Why didn’t they stay?