LENOIR CITY — An independent review of the Lenoir City Housing Authority has revealed numerous deficiencies.
The report, conducted by Brown Jake & McDaniel PC, and presented to City Council members on Monday night, found problems with contracts, inventory, charge accounts and more than two dozen issues related to travel expenses.
City Attorney Jim Scott told council the audit raised “significant concerns” both for the type and number of deficiencies discovered. He recommended that the Housing Authority’s board of directors continue to investigate and suggested the matter should be turned over to the Tennessee Bureau of Investigation.
Mayor Tony Aikens also suggested that the board contact legal counsel to deal with the issues raised in the audit. Aikens said he has been concerned about the administration of the authority for many years since he learned that several board members may have been appointed illegally by his predecessor.
“The audit proves there was mismanagement. I hope the new board will take swift and appropriate action,” Aikens said.
Frank Hahn, who along with two other new board members was appointed to the housing board last year by Aikens, pushed for the audit during a meeting in March. He said it is always a good idea to perform an audit when there is a change on the board. He said he plans to pursue the investigation further after meeting with other board members.
Housing Authority Executive Director Debbie Cook said she was not impressed with the audit’s findings. The authority is regularly audited by HUD and no problems have been found in the past.
The report found that many office items were not serial numbered or recorded. Checks were not regularly deposited into the bank. Some items were purchased by credit card without proper invoicing, according to the report.
The audit also highlighted excessive spending. The report found that an office door was upgraded from an original cost of $850 to $3,400 and the remodeling of the executive director’s office cost $12,286. More than $20,000 was used to add a parking lot and $36,000 was used to build a covered walkway to the lot, the report said.
Cook said that the door to her office had to be replaced with a high security door. The total cost to remodel her office, she said, was less than the $15,000 budgeted by the board for the work.
Most of the deficiencies were focused on travel and reimbursement policies where the auditors found numerous instances of employees receiving per diem supplements for meals when meals were included with the cost of the conference.
Cook said she has always followed General Services Administration guidelines for travel reimbursement. The authority also has its own travel policies, which are closely followed, she said.