COpy IN THE CRIMINAL COURT FOR KNOX COUNTY TENNESSEE SIXTH JUDICIAL DISTRICT In the Matter of: KNOX COUNTY TRUSTEE'S OFFICE Report of the Findings and Recommendations of the Investigative Grand JUry, Empanelled November 1. 2010 Since November of 2010, this Investigative Grand Jury has heard evidence involving the operation of the Knox County Trustee's Office going back as far as the 1970's. In light of this evidence, the members of this Investigative Grand Jury feel obligated to offer recommendations regarding abuses of the power of the Knox County Trustee. We have concluded that the personal interests and benefits of the Trustee and some members of the Trustees staff, through means both improper and fraudulent, have often been placed ahead of the Trustee's duty to the citizens of Knox County, which the Office of Trustee serves. The Investigative Grand Jury was surprised to learn that the annual audits of Knox County elected offices are essentially designed to determine if the money coming into the office and money going out of the office was handled within established procedures and match up with the balance of money on hand at the end of the audit year. Waste, fraud and abuse within an office is unlikely to come to light, since that is not the task assigned to the auditors. We have concluded that in the Trustee's Office, it has been a common practice to confer benefits such as travel pay, unearned annual and sick leave, bonuses and raises, not because they were earned or deserved, but for no other reason than the employee was favored by the Trustee, sometimes for political reasons. We also learned that in the past there was no inventory or marking of property held or purchased by the Trustees office and that over the years items such as computers, televisions, oriental carpets and fine furniture has simply disappeared. Records of services contracted for by the Trustee's Office in past years are either non-existent or missing. Missing records include forms required by the Internal Revenue Service. We also found that work hours actually performed by some employees were often significantly lower than that for which they were paid or simply not preformed at all. While the evidence we have heard did not focus on whether the Trustee's office had staffing greater then necessary to perform its work efficiently, we heard enough to raise our concerns in that regard. The practices laid out above were generally described as being "in the discretion of the Trustee" and that standard has been ingrained in the culture of the Trustee's Office. We have learned that the Knox County Trustee primarily has administrative responsibilities to collect taxes and invest the County's money with little or no role in making public policy. We observed that fees paid to the Trustee's office were often not considered as "the taxpayer's money" since they were not part of taxes imposed directly by Knox County. At the same time, we do not want to impugn the integrity of many long time dedicated employees of the Knox County Trustee's Office who did their jobs honestly and gave Knox County the work for which they were paid. Recommendations: 1. The Trustee should be appointed by the County Mayor as head of a County department to collect taxes, with the County Mayor having ultimate authority and responsibility for the operation of that department, under the oversight of the County Commission. 2. Until such time as they are placed under the direction of the County Mayor, Annual Audits for the Knox County Trustee's Office and other elected County offices should include: o Audits should incorporate specific procedures to identify waste, fraud and abuse. Audits should include an evaluation of staffing, workloads and operational efficiency. o 3. Until such time as they are placed under the direction of the County Mayor, the following procedures and policies should be put into practice in the Knox County Trustee's Office and other elected County offices: o The pay and benefits should be based solely on the nature and amount of work, quality of performance and years of experience. Qualifications and ability not political or personal connections should determine hiring, pay and benefits. The Knox County Finance Department should handle expenditures contract services and purchases using the normal County procedures. for o o All property of the office should be registered with Knox County and physical markings with tracking numbers should be attached to all items other than supplies used up in daily operations of the office. Offices should have a Policies and Procedures handbook reflecting the reflecting the practices set out in this paragraph (3) and the accountability o 2 .o-..TTFT . . Tv--.. -- - --.-- Ewen