Marion County leads area in missing funds

Marion County leads area in missing funds

June 24th, 2012 by Ben Benton in News

Holly Henegar is seen in this file photo.

Holly Henegar is seen in this file photo.

Photo by John Rawlston /Times Free Press.


The list below shows counties in Southeast and South Central Tennessee in which public funds went missing in recent years and amounts not recovered as of June 30, 2011.

County // Originally missing // Still not recovered

Coffee // $4,768 // $4,768

Cumberland // $10,330 // $8,893

Franklin // $7,445 // 0

Marion // $114,194 // $114,194

Polk // $1,047 // $1,047

Rhea // $5,297 // $5,297

Sequatchie // $46,639 // $8,153

Source: Tennessee Comptroller of the Treasury

Tennessee's Comptroller of the Treasury on Thursday released a report showing that Marion County -- at $114,194 -- accounts for nearly one-seventh of $736,694 in public funds still not recovered from $1.47 million missing from public coffers over the last several years.

A recent guilty plea in Marion County Circuit Court was an initial step toward recovering part of the money missing in the wake of an investigation of the county's administrator of elections in 2010, records show.

A 2010 Tennessee Bureau of Investigation probe led to felony theft charges against longtime Marion County elections administrator Holly Henegar. Henegar was under investigation for improperly issuing more than 107 checks to 34 individuals -- some as young as 14 -- for more than $27,000, the release from the comptroller's report states.

On May 21, Henegar pleaded guilty to a felony charge of forgery between $1,000 and $10,000 before Circuit Court Judge Buddy Perry. She was sentenced to three years' probation, 100 hours of community service and restitution of $10,000, Marion County court records show.

When state Comptroller Justin P. Wilson discussed his initial findings in August 2010, he said he'd "never heard of anything like this before."

Henegar was "using little children to defraud the taxpayer," Wilson said. "This is beyond my comprehension."

The remaining outstanding funds in Marion County stem from another $94,823 that went missing from the Haletown Volunteer Fire Department between January 2005 and April 2010 in connection with Henegar's husband, B.J. Henegar. Auditors and TBI agents said the cash shortage arose from checks written against fire department bank accounts to pay his "personal expenses." B.J. Henegar, who was arrested along with his wife on Oct. 4, 2010, was serving as the fire department's secretary/treasurer, the release states.

B.J. Henegar remitted $7,800 to the fire department to drop the balance of missing money to $87,023, according to the release.

The Henegars' cases are among several local examples of such cases, records show.

Across the rest of Southeast Tennessee, the comptroller's report shows Sequatchie County has $8,153 outstanding, Rhea's share is $5,297, and Coffee, Cumberland and Polk counties have outstanding amounts, as well.

No arrests were made in Coffee or Cumberland counties, and officials in Coffee County decided to write off the loss, the release states. Cumberland County so far has recovered $8,893 of its lost money. On the other hand, arrests followed investigations in Sequatchie, Polk and Rhea counties, the release states. Court orders on judgments in many of those cases included restitution, though some of those amounts have not been repaid. A more-than-$30,000 loss in the Sequatchie County Schools payroll account was covered by the system's insurance carrier.

"These thefts are a reminder that local government officials need to be vigilant about the potential that taxpayer dollars can be stolen," Wilson stated in Thursday's release. "The best safeguard against theft of public funds is the use of proper accounting and bookkeeping techniques. Quite often, county government officials believe there's no way theft would occur within their organizations -- then they are shocked when it does.

"As the old expression goes, 'trust, but verify.'"