State Auditor’s findings discussed, explained by County Judge/Exec.

by Barbara Atwill
Fulton County Judge/Executive Jim Martin and Magistrates discussed at length during the court session Monday night, recent state auditor's findings Fulton County Judge/Executive Jim Martin and Magistrates discussed at length during the court session Monday night, recent state auditor's findings

Kenney Etherton, Executive Director of Fulton County Transit Authority, appeared before the Fulton County Magistrates Aug. 12, to request from them a building formerly used as the Fulton County Office Building and Economic Development Partnership Director’s office in Fulton.

Magistrates Jim Paitsel, Wade Adams, Hugh Caldwell, Shaun Parks, and Judge/Executive Jim Martin were in attendance.

“We have been using the building for approximately two years, can’t remember exactly,” stated Etherton.

“With the growth of our organization, we have pretty well occupied the entire building with what we do every day. Our safety department, human resources department, and training department are located in the building we are asking to be transferred back to the Transit Authority. Several years ago, when Fulton Bank, later Reelfoot Bank, merged all the property in the area was donated to the Transit Authority, the Transit was about to be homeless where they were. The building was used for the Transit Authority for six or seven years, before we were able to build the building we are in now,” continued Etherton.

“We have out grown the facility we are in now. We have built a shop, where we do about 90% of our maintenance on site. We need the property to further our growth. We have the potential for some grant dollars to add on to our property and without this property back, that makes it impossible to add on to our current facility we are in,” stated Etherton.

Judge Martin said, “We moved the Economic Development office out of there and the Judge/Executive had an office there, which I’ve never been in, I do business over here. When we would have a heavy rain, we would be flooded because the slab was built below grade. The Economic Development office was moved into Fulton City Hall, and basically, we abandoned the building. We still pay the insurance.”

Etherton said, “We leased the property from the County, for $1. We pay the utilities and maintenance on the building.”

Judge Martin stated, “As far as Fulton County is concerned, it doesn’t do us any good at all.”

Caldwell asked, “How many employees do you have that stays on the property and are not on the routes?”

Etherton answered, “We probably have 15 employees on site and another four drivers on routes.”

“What would you do with this building?” asked Judge Martin.

“We have contemplated a couple of different things with it. One is tearing it down for parking, another is using it for record retention. We would go in and build the floor up a little bit. We have a tremendous amount of records we have to retain. We don’t have a firm plan on what to do. It will depend on parking space for employees. We have about another 25 people that come in and out of the building in a day’s time,” continued Etherton.

Judge Martin asked, “So if you don’t get this piece of property that sits in the middle of your operation, would your expansion be prohibited and you have to move to another site?”

Etherton answered, “Yes.”

The Transit Authority would then have to move and would lose what they have invested in the property with the maintenance and office, with about $1.5 million investment at the present site over the years.

“We think we can do everything we need to do for about $615,000, less than $1 million. Which is a better use of taxpayer dollars than what we were trying to look at in the beginning. We give about 10,000 rides a month in Fulton County,” continued Etherton.

The Magistrates voted to transfer the building at 300 Eastwood Dr., in Fulton to the Transit Authority, with the Transit paying the costs.

Judge Martin updated the Magistrates on the Audit Report.

“I think what warrants to be said at this point, is in the Audit there are several comments about findings that were made in the 2014-15 Audit, that were not corrected in the 2015-16 Audit. What the auditor didn’t say, that I think the public needs to understand is there was a huge delay in the Audit process starting before I got here. Actually, the 2013-14 Audit was not done when I took office in January 2015, and the 2014-15 Audit didn’t get done. Those two Audits were delayed because there was an FBI investigation going on here. There were a lot of things that took place and continued until sometime in 2017. We got the Audit for 2013-14 and 2014-15, then the state came along and did this Audit for 2015-16, ending June 2016. In the audit they said there were things done that were quoted in the 2014-15 Audit that you didn’t correct,” Martin said.

“The reason we didn’t correct the Audit, is because we didn’t have the Audit. We went through the 2014-15 Fiscal Year and 2015-16 Fiscal Year without any Audit, so how could you correct an Audit finding that had been made. This is one issue I wanted to point out,” continued Martin.

“There were some other issues there that are really interpretations of things. If every Magistrate read the rule of capitalization and operating leases, we would probably come up with five different conclusions. The big part of this Audit was about a grader we leased for three years. The auditor said we failed to capitalize the grader on our asset list. We did not capitalize it because it was not purchased, it was leased. We never intended to purchase it and their audit finding was we should have put the $254,000 grader on the asset ledger. We didn’t enter it on the asset ledger, because we considered it an operating expense. A second finding on the grader said we failed to get state approval anytime you spend over $250,000. We leased the grader, which we paid maybe $100,000 in lease payments, maybe over three years. The Auditors maintain we should have put it on the asset ledger. We leased for three years and let it go back. So, what do you do with the asset on your asset ledger when you no longer have it,” Martin said.

“There will be a letter to come out in the paper that the State Auditor has prepared. It says we have failed to do this and failed to do that, and sounds like something big, when really it is not. It is something simple, like it was a capitalized expenditure and we had the opinion it was an operating expense. It is easy to correct. The big thing I wanted to point out is the Audit Report would say we had this Audit finding in 2015 and you did nothing about it. Well we didn’t get the 2015 Audit until a year after this period has been audited. At one time, we were four years behind on Audits. Fulton County wasn’t behind, the State Auditor’s office was behind and the private auditor that was doing this business was behind,” continued Martin.

“We don’t want to ignore Audit findings. We want to look at them and attend to them and make sure going forward that everything is done the way it should be done. In that thought, I would like to appoint a committee, an Audit committee, and ultimately, no matter if the treasurer or employee makes a mistake, and you don’t know about it, you are still responsible for it. I would like to nominate Hugh and Jim to be on the committee, and the County Attorney,” Martin said.

Paitsel said, “I didn’t see anything under Summary about previous years of 2012, 2013, 2014. I saw one thing about 2015. If you take out the County Jail stuff, everything had to do with this Fiscal Court. All the responses were by the County Judge. We are responsible to the Fiscal Court for oversight. We can’t accept that the Treasurer says this is what is going to happen or this is what the payroll is. We have to review that and meet with you before checks are written, and go through those things. It will be a burden on us, but that is what we have to do.”

Fulton County Treasure Leslie Duncan stated, “I want to go on record that this was the previous Treasurer not me.”

Paitsel continued, “I understand that and you were the previous Financial Officer to the Treasurer. One of the findings says ‘Now that has been cleared up because your second person is the Financial Officer’. Well, I don’t see that it is any different. The responsibility comes back to the Fiscal Court and that is us. It is not the County Judge and it is not you. It is us. And if something else happens and we don’t get this straight, I don’t think we just come and talk to you about it. I think we have to come as a committee and talk to you at least before the Fiscal Court meeting and go through all the bills and make sure they are correct and go where they are supposed to go. We can’t have this come back on us.”

“We’ve had things to come up in the past, and you’ve given opinions that you are not qualified to give, honestly. Talk about a contract in the past and said we could not break it and we could have. You said it would be a hardship to change banks. Doesn’t matter, banks change. It’s not even Heritage Bank any more, it changed. We will be with a new bank one way or the other,” Paitsel said.

Duncan replied, “I think you should come in here and see what day-to-day operations are. So, you can see the difficulties that will cause.”

Paitsel answered, “I understand. But the thing is the State puts it on us, the Fiscal Court. It is not the County Judge, not to the treasurer. I don’t think we should ignore our duties by doing that. I don’t want to be on the committee, but this was bad. I don’t know where everything goes.”

Duncan said, “But you are coming after me. It was not me back then. Me and Carol have worked weekends and nights to straighten this mess up when we took over. So please don’t come at me like it is me.”

“I’m saying the previous Fiscal Court didn’t do their oversight and we have to,” continued Paitsel.

“I won’t disagree with that. But I will disagree with the statement that there were people under the Treasurer that had responsibility. If the Treasurer had been communicating with people and telling the truth to the County Judge and others, maybe some of this would have been corrected. I don’t think any of those mistakes made before June 2016 is her responsibility,” Martin said.

“Your response was she was not the Treasurer. But the response also says that when we separate duties, and not doing the oversight, that she will talk with the Finance Officer, and that is what she was. That is still not separating the duties,” continued Paitsel.

“No one was talking to the Finance Officer back then. Her duties were isolated to processing checks. The accounting function she was not involved in. I don’t think it is right to say or insinuate that there is any responsibility left with current employees with this mess we had. Our Treasurer walked out of here the last of May. The books were not balanced. She did not do the proper accounting procedures. We dumped it in her lap and even the people at the DOG (Department of Local Government) could not help her get it clean. There were mistakes made. You can’t unmake a mistake. But I do think going forward, as I said in my responses, that we have corrected those problems and I want this committee in place to see the problems have been corrected. I think Leslie did a really good job to clean this up,” Martin stated.

“I don’t think we need to point the finger in the wrong direction. I do think there were mistakes. I don’t think the Fiscal Court exercised any oversight, because it was beyond their scope of what they recognized as being their duties and quite frankly, to some extent, beyond their capacity to understand. I don’t want to be rude about that, but that is truth. Anyone can run for these jobs, but there is nothing in the statutes that says you have to be an accountant, or understand payroll to be elected to this position. But when the Audit is done, it says the Fiscal Court fails. If you don’t get good qualified people, I think that is what this court is here for. And your actions to correct this is appropriate. I don’t disagree with that all,” stated Martin.

Martin continued, “Going forward, I think we need to demonstrate to the public that we recognize we have these weaknesses as reported in the Audit and we are going to introduce a program to do something about it.”

Judge Martin said that when he first took office in 2015, he noticed some problems and went to the Auditor under contract for the 2013-14 and 2014-15 Audits. He said he needed help with things he saw going on and whether or not they are legal and the Auditor gave no response or help, and they are no longer the Auditors.

Judge Martin gave a report on the Ambulance Drive stating there were 558 household in the county on water bills and 59% are paying the ambulance bill. He also reported there are 510 households not on water meters and six percent have said they will pay. Residents in the cities of Fulton, Hickman and South Fulton are paying 90%, he said.

Judge Martin reported there will be a meeting in Louisville Aug. 29, with the Legislature to try and get help with this problem. He said the State Legislature recognizes garbage pickup, water, sewer, and gas are essential services and when you receive those services you must pay for them. They do not do that for an ambulance service, he said, adding, hopefully a Bill will be introduced to rectify.

Some farmers in the Upper Bottom have called about some culvert issues. As soon as an engineering company finishes the contract of inspecting the culverts, the Judge indicated he would like to propose an 80/20 grant program to the KY DOT (Kentucky Department of Transportation) to repair those culverts.

The ditch going into the Upper Bottom needs attention, he said, and the property owner will donate dirt, and the County will put in a culvert and cover with dirt.

Judge Martin reported, “The trustee, on two bond issues, is still holding $11,144.92 in jail money not used or planning to use. The Treasurer recommended, as well as the Jailer, that we draw that money down and put it in a sinking fund, used to pay off debt at the jail early.”

The second reading of Ordinance 2019-03 was conducted with an amendment for Continuity of Government in the event of an emergency. If the Judge/Executive is not capable of fulfilling his duties, the next in line will be the Director of Emergency Management, then Magistrates District 1, District 2, District 3, and then District 4.

A Request for Proposal (RFP) for the Fulton County Fiscal Court Banking Services advertising was provided. The RFP is inclusive for Fulton County banking institutions only. The Magistrates authorized the advertising for request of Proposal for Fiscal Court Banking Services.

In other action the Magistrates approved:

• Earthquake Business Income Insurance Quote for lost income

• Contract with Kentucky Emergency Management for Applicant’s Agent

• County of Fulton Tax Rates for 2019/2020 went down .10 from 13.8% to 13.7%

• Resolution 2019-06 Designation of FCIDA (Fulton County Industrial Development Authority) to receive TVA (Tennessee Valley Authority) Funds

• Fulton County Road List for paving Fiscal Year 2019/2020

• Advertising for paving contractor for Fulton County Roads for Fiscal Year 2019/2020

• FEMA Gravel Project in Upper Bottom region of Fulton County

• Advertising for FEMA Gravel Project in Upper Bottom

• Fulton County Detention Center Kitchen Project update

• Transferring a 2003 Chevy Venture Van as surplus property by Fulton County to the City of Hickman with the City paying the transfer expenses

• Hiring of Donnie Evans as part-time Fulton County Dog Warden for a minimum two hours per call, to be called at the discretion of Fulton County Sheriff

• $2,200 for rental on a tower for radios to talk from one end of the County to the other, and the Code Red System in the Transfers was discussed with Magistrate Jim Paitsel voted nay on payment associated with the Code Red System.

• Bills: Incentive pay was turned in by Wade Adams, Magistrate District 2, in error. It was approved, but it was noted not to repeat the error.

The Fiscal Court went into Closed Executive Session pursuant to KRS 61.810(1)(f) for 45 minutes and returned with no votes and no decisions being made.