The Sullivan County Board of Education still would submit an annual spending proposal to the commission. But the school system’s accounting personnel could be relocated to the county’s Office of Accounts and Budgets.The school system would no longer be able to develop revenue projections that differ from those developed by Accounts and Budgets.
A major point of debate at this point is the method the county would use to consolidate. The commission could simply adopt the state’s 1981 system. Or the commission could ask the Tennessee General Assembly to pass a private act creating an accounting management system tailored specifically to Sullivan County. The first option could be adopted by a vote of the commission, with a required two-thirds majority voting “yes.” The second option would require creation of a proposed private act; approval of that proposal by a two-thirds majority of the commission; submission to the General Assembly by a lawmaker; approval by the General Assembly; and another approval by a two-thirds majority of the commission.
According the the taxpayer-funded County Technical Assistance Service:
• Under the County Financial Management System of 1981, a finance department is created to administer the finances of the county for all funds handled by the trustee, in conformity with generally accepted principles of governmental accounting and rules and regulations established by the state comptroller of the treasury, state commissioner of education, and state law. Unlike the 1957 laws that Sullivan County’s current accounting system operates under, the 1981 program includes the management of school funds just like all other county funds.
• This system requires a county financial management committee consisting of the county mayor, supervisor of highways, superintendent of education (director of schools), and four members elected by the county legislative body. These latter four need not be members of the county legislative body, but may be. The committee establishes policies, procedures, and regulations to implement a sound, efficient county financial system.
• The county financial management committee appoints a director of finance. The department of finance, under the supervision of the director and subject to the policies and regulations of the county financial management committee, is responsible for the following areas: budgeting; accounting fiscal procedures; payroll; purchasing; conflict of interest — improper gifts; and compensation of committee members.
• This system is to be installed within 13 months, beginning on July 1 of the fiscal year after its adoption and being completed by Aug. 1 of the second fiscal year.
• This system must be approved by a two-thirds vote of the county legislative body or a majority of the voters in order to be effective in any county.
Sullivan County currently operates under a financial management plan found in state law from 1957.
In its annual audits of Sullivan County’s finances, the Tennessee Comptroller’s Office of the Treasury’s Audit Division has repeatedly suggested Sullivan County move to a consolidated system, such as the 1981 system.
This past Thursday, Deputy Comptroller for the Tennessee Comptroller’s Office Jason Mumpower — along with Bryan Burken and Mark Treece, members of the audit division — spoke to a called session of the Sullivan County Commission.
Their presentation included the distribution of a potential template for the creation of a private act. They said a private act offers the county more options to create a financial management system specific to its needs, compared to adoption of the 1981 system, which would allow no flexibility. An example: under a private act, the finance committee’s makeup could be altered from the description from CTAS noted above (the template for a private act distributed to Sullivan commissioners outlines a seven-member finance committee made up of the mayor, highway commissioner, director of schools, three county commissioners, and one school board member). Another key difference: under the 1981 system, the Tennessee commissioner of education may withdraw the school department from the consolidated financial system if neglect is proven; a private act would not necessarily include such a provision. And under the 1981 system, the school system’s accounting employees may be transferred to the county Accounts and Budgets office — while under the template, those employees shall be moved.
Sullivan County is one of 14 counties using the 1957 system and four of those counties include their school system. Twenty-five Tennessee counties, mostly rural, have adopted the 1981 system, and one of those excludes its school system. A dozen counties operate financial management systems created by private acts. (The remainder of the state’s 95 counties use various other systems, including five that are by charter or metro charter, and three that use a 1993 law. The rest are under general law budgeting provisions.)