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Opinion Letters Procedures appropriate for ‘mom and pop’ shop

An open letter to Macon County Commissioners, the manager, and county residents:

The alleged embezzlement of around $50,000 from Macon County taxpayers by a county employee highlights incompetency within the county’s “award winning” Finance Department. The allegations in Judge Letts’ search warrant for the Macon County Board of Elections (BOE) office lay out the damning details.

The alleged embezzler wrote at least 29 “check requests” between July 2013 and mid-January 2014 with insufficient documentation and no or forged signature authorizations. Without hesitation, Finance’s accounts payable (A/P) issued checks totaling around $50,000 to sham vendors. The checks were given to the embezzler who allegedly pocketed the money.

Macon County, with over 400 employees and a budget of nearly $60 million annually, has a Finance Department using purchase order (PO) and payment procedures appropriate for a “mom and pop” shop.

I hope the county’s Finance Department uses procedures for handling regular POs like the following used by private sector companies. Employees requiring materials or services prepare requisitions approved by someone with appropriate spending authority. The requisitions are submitted to a purchasing agent who determines the vendor and negotiates pricing. The PO is approved by someone with appropriate PO execution authority, before being issued to the selected vendor. When the vendor fulfills the PO, it submits an invoice to A/P. A/P validates the receipt and pricing, and only then approves the vendor’s payment. If there are any discrepancies, payment is NOT made until the discrepancies are corrected. It’s really not complicated, and minimizes fraud and embezzlement.

Why would the county’s Finance Department process any “check requests” except in very limited and carefully controlled circumstances? To handle 29 “check requests” from one employee over a short period is astounding. Especially since many didn’t meet authorization requirements, involved “vendors” who weren’t vetted, receipt of services wasn’t verified, and checks weren’t mailed to the vendors. Was there a co-conspirator within the Finance Department? Will any Finance Department employees be disciplined for failure to follow procedures? Are there any written procedures?

“Check requests” are ripe for fraud and at least one employee figured that out. How many other undetected embezzlements have occurred, or are occurring, within Macon County government?

Why weren’t the three BOE members monitoring their budget and identifying excessive expenditures? Why wasn’t the Finance Director monitoring the excessive BOE expenditures vs. budget?

The county manager must hire an independent forensic auditor (not Martin Starnes and Associates), or an auditor from the Office of the State Auditor, to thoroughly review all aspects of Macon County’s Finance Department. The forensic auditor must assure everyone that no other illegal activities have occurred or are occurring, and assure that all purchasing procedures in the Finance Department are brought up to 21st century standards.

Until a forensic audit is completed, corrective actions are implemented, and a public report is issued to county residents answering all questions raised, residents should have no confidence that the county’s Finance Department is protecting taxpayers’ money.

Vic Drummond — Franklin, N.C.


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