Walker County's mismanagement of funds violated state law, audit says

Walker County Commissioner Bebe Heiskell
Walker County Commissioner Bebe Heiskell

Walker County, Ga., Commissioner Bebe Heiskell promised not to put money in the wrong place again - again.

In the county's latest financial audit, filed last month, an accountant raised a concern: The county mixed up money for the general fund and the sales tax fund. Heiskell said the problem should be fixed going forward. She said the same thing last year, when the auditor pointed out the issue the first time.

To understand the issue, you have to first understand the Special Purpose Local Option Sales Tax. Every five years, voters can decide whether they want their county to issue a 1 percent sales tax. The revenue will go to their county government, and the government's leaders have to set the funds aside for "capital projects" - things such as new buildings, paved roads, cars for the police department.

Under Georgia law, the counties that get that extra funding have to keep it in an account separate from the general fund. Likewise, when the county gets grants to go along with any of the special capital projects, they have to keep that money in the sales tax fund.

In the fiscal year 2014 audit, an accountant pointed out that this grant money was actually in the general fund, where it did not belong.

"A separate fund is being opened into which all grant funds are to be deposited," Heiskell wrote to the auditor. "The general fund will advance payment for all expenditures and then be reimbursed from the grant fund as appropriate."

In the fiscal year 2015 audit, an accountant pointed out that the same problem still exists. As of Sept. 30, the county's leaders needed to transfer about $800,000 to the correct fund.

"A separate fund has been opened into which all grant funds have been deposited," Heiskell wrote at the time. "The general fund advances payment for all expenditures and then is reimbursed from the grant fund as appropriate."

Heiskell did not return multiple calls or an email seeking more information Wednesday. But in the audit, she wrote that the funding discrepancy was squared up by December. The $800,000 had been moved to the right fund.

According to the audit, the county also transferred another $250,000 from the general fund to the sales tax fund between October 2014 and September 2015.

Barry Huggins - the partner in charge of the Walker County audit for Johnson, Hickey & Murchison - said that money was for the county's project repaving some local roads. According to the audit, the county spent $1.5 million on the project.

The county also received some state funding from the Georgia Department of Transportation in the form of a Local Maintenance & Improvement Grant. That is the money that went into the general fund instead of the sales tax fund.

In the fiscal year 2014 audit, the accountant noted that the problem violates state law.

But Amy Henderson, a spokeswoman for the Georgia Municipal Association, said the offense isn't exactly criminal.

"There's not an agency that checks these kinds of things," she said.

Henderson pointed out that the voters hold the power with the special sales tax. They're the ones who decide whether the county continues to receive the money.

"It's very important to maintain the public trust," she said. "The danger is that you lose the public trust."

Other notes from the Fiscal Year 2015 audit:

  • Walker County's assets exceed its liabilities by $54 million.
  • That value is $12 million less than it was in 2014.
  • The county's debt sits at $45.7 million.
  • In 2014, the debt was at $47.2 million. In part, that is because the county made a $4.5 million bond payment, and a $7.7 million tax anticipation note "retired." The county also took out a new, $10 million tax anticipation note in March 2015. The county paid it back in December.
  • Mountain Cove Farms, the county- operated resort, lost $675,000 in 2015.
  • The year before, the county lost about $880,000.

Contact staff writer Tyler Jett at tjett@ timesfreepress.com or at 423-757-6476.

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