State investigators say spending by the chairman of the Fourth Fractional Township in Polk County, Tenn., on sports programs at the local high school and in other areas may violate state conflict of interest laws.
All told, auditors in the state comptroller's office questioned $28,365 spent between July 1, 2012, and June 30, 2017, by the Fourth Fractional Township.
The township was created in 1935 by Congress and a private act in the Tennessee General Assembly on 640 acres of land, and its funds were "intended for the purpose of educating the youth of said Township," the special audit report states. The township is governed by a three-member board serving four-year terms.
Money for that came from royalty payments from copper mining companies before the mines closed in the 1980s, the report states. The township continues to own at least some of the land and a building that once was Kimsey Junior College and later Ducktown Elementary School. The building is now vacant, according to the report.
Auditors found the board chairman, who is not named in the report, gave significant sums to Copper Basin High School: $16,930 to the girls volleyball and softball programs and $6,567 to the football, baseball, cheerleading and general sports programs. The chairman is head coach of the girls volleyball and softball programs and is paid by the district for those duties.
Auditors said the payments may be illegal because the chairman never acknowledged he had a conflict of interest in making them, as is required by law.
Auditors also found a $1,925 loan to the community swimming pool, which the chairman was involved in operating. The loan was repaid with interest but was still an improper use of money intended for education, the auditors said.
Finally, they noted the chairman paid $2,943 to his son for security and lawn maintenance of township property.
"These payments appear questionable due to the related party transactions between the father and son," the report states.
Further, the auditors criticized the township for being unable to provide records of land sold or adequate accounting records. They said there is "little management oversight," no written guidelines for use and distribution of funds and not enough segregation of duties to secure the town's financial transactions. They said the board doesn't have regularly scheduled meetings and inadequate minutes fail to document the decision-making process.
Auditors made multiple recommendations to tighten up procedures and institute checks and balances to protect the township's property and finances.
The report said the audit was sent to the township's commissioners, Gov. Bill Haslam and the state legislative delegation, among others. Its findings also were reviewed by the 10th Judicial District Attorney's Office.
Polk County government appeared to be closed Wednesday, and the chairman could not be identified.
Steve Crump, district attorney for the 10th Judicial District, said in an emailed statement he has received the report and will have the investigators in his office review it to see if there's evidence any crime was committed.
"Once the investigation is complete, the full facts gleaned from the investigation will be presented to the Polk County Grand Jury for their consideration," Crump said.
This story was corrected to say auditors found no reason to think the chairman was paying coaching supplements to himself from township money. Updated at 4:30 p.m. and again at 10:50 p.m. on Wednesday, Jan. 17, 2018.