Posted on 10/17/2002 5:45:34 PM PDT by GailA
State calls for audit of Shelby expenses
By Michael Erskine erskine@gomemphis.com October 17, 2002
Amid growing allegations of abuses, state auditors have requested an independent review of travel and credit card expenses for all of Shelby County government.
Internal controls over travel and credit and procurement cards are "so lax," wrote Richard V. Norment, the state comptroller's director of county audit, "that there is a high probability abuse has occurred and may be occurring throughout Shelby County government."
In a letter to county Mayor A C Wharton, dated Oct. 9, Norment requested that the mayor hire an accounting firm to conduct the audit. Norment wants to examine travel accounts as well as credit and procurement card activity for the period of Sept. 1, 2001, to Aug. 31, 2002 - the last year of former mayor Jim Rout's term.
Wharton said Wednesday evening that the letter was "basically an order" to conduct the audit.
"This is not the hand I wanted the dealer to deal me," Wharton said, ". . . but we're going to be better, we're going to be stronger and more deserving of the citizens' trust.
"Let's just go on and get everything out on the table and not cry about it . . .''
Wharton said he believes the audit will extend to records of the County Commission and other elected officials, though the state will determine the size and scope of the sample.
Norment wrote that he took an interest in the matter after state auditors examined records of the Juvenile Court Clerk's Office earlier this year. That audit is part of a federal grand jury probe into the office's operations under former clerk Shep Wilbun.
Norment had also previously expressed interest in examining travel records of the commission.
In addition, the county has been under increased scrutiny since August, when former mayoral aide Tom Jones was suspended for using his county credit card for personal use.
An internal audit completed two weeks ago determined that Jones "misdirected" more than $125,000 in county funds for his personal benefit. It also concluded that Jones still owes $87,483 for personal items charged to his county-issued cards. Jones says he has repaid the county almost $50,000 and owes no more.
The Commercial Appeal has reported that Jones and Rout, during the last months of the administration, were both reimbursing the county for various expenses charged to their cards.
The newspaper also recently reported details of a $25,000 trip to Australia made in March by Rout, Jones, Kevin Kane, president of the Memphis Convention & Visitors Bureau, and their wives.
Rout, reached at home Wednesday evening, had little to say about the pending audit.
"If that's what they feel they need to do, I'm sure that the county would cooperate with them as I would if I were there," Rout said.
According to Norment, his office will work closely with the accounting firm on the audit, which will sample a "representative" number of records. He left open the possibility of expanding the audit to include more records and more years if fraud is found.
The audit will be paid for by Shelby County and could exceed what has been budgeted for auditing. County officials have drafted a request for bids to conduct the audit.
Wharton said it is critical to expand the county's capacity to undertake internal audits without specific requests from other agencies in order to implement consistent guidelines and procedures. The mayor also plans to create a five-member audit committee with at least two members from outside county government to oversee procedures.
- Michael Erskine: 529-5857
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