Coffee County 911 payments called ‘questionable’ by department audit

Tennessee Comptroller’s Office auditors say Coffee County’s 911 office made a “questionable” $15,000 payment to its director in 2017 and multiple payments to employees’ relatives in possible violation of the county’s nepotism policy, among other findings.

According to an investigative comptroller’s report released Wednesday, state officials determined the district made a payment of $15,000 to the former director for services he provided related to the district’s new building.

Although audit documents do not identify that director, Steve Deford was the director of the 911 office until June 27, 2017, and had at that time been an employee of the county for 30 years, according to the former director himself and appeals court records.

Current director Diane Argraves, who became director in August 2017, didn’t immediately respond to calls Wednesday for a comment on the 911 office’s behalf.

The $15,000 payment — for “special services” the former director provided related to construction starting in 2014 of a new $1.2 million 911 building in Manchester — was made to Deford 10 months after the building was finished and two weeks after he announced his retirement, auditors state. An initial $5,000 of the $15,000 was approved for a financial advisor “although legal counsel indicated this was a duty to be performed by the board chairman, board treasurer and the director.”

Auditors questioned why a separate financial adviser was hired by the board if Deford was acting in that role.

“The timing of the payment gives the appearance of a bonus related to the director’s retirement,” the audit states in a discussion of additional information that also made the payment appear questionable.

Deford said Wednesday in a telephone interview that he kept the 911 office’s books the same way for 30 years, complete with annual private audits, and had never had problems. Those audits were sent to the comptroller and state 911 board for review, he said.

The $15,000 was payment for his services as project manager overseeing the construction of the new 911 building, Deford said.

The payment didn’t go through county payroll, no federal taxes were deducted and it was not reported on Deford’s W-2 Form, auditors said. Contractors filled the roles of project manager and the construction firm in charge of building it, according to the report.

“We made attempts to talk with the former director and were able to talk with him once briefly, but we were unable to establish a meeting with him,” auditors state in the report.

Deford said he was unaware auditors wanted to talk to him and didn’t know an investigative report had been released.

The $15,000 payment was properly approved by board members, documented in meeting minutes and was public knowledge, he said.

Auditors said in another finding the 911 office paid $3,400 to three employees’ relatives, “which appear to be conflicts of interest” and conflicts with the county’s nepotism policy on hiring employees’ relatives.

The husband of one employee was paid $240 for moving items from the old office to the new office, and the husband of another employee was paid $2,645 for mowing services at the office. An employee’s two grandsons were paid $455 and $515, respectively, to do sanding work at the old office building, the audit states. The transactions were recorded in handwriting on a notepad for two of five disbursements. Office staff identified the handwriting for auditors as that of the former director.

Deford said he had “no idea” what problem auditors were referring to in that finding.

The third finding involved $891 worth of “questionable” food purchases. Some of those purchases were not adequately supported with itemized receipts. The regular and general purchase of food without proper documentation could lead to fraud and abuse, officials said.

“There was a receipt for every penny that was spent,” Deford said.

Lastly, the 911 office did not always follow its adopted bylaws and the county’s travel policy. Hotel room charges exceeded the allowable rate and travel claims were not submitted within a reasonable time, officials said.

Auditors said there should be more internal financial controls in place.

“It’s funny. I’ve kept the books the same way for 30 years,” Deford said. “I’ve never been written up in an audit for the 30 years I was there.”

Deford said there was no wrongdoing involved and he chalked up the sudden interest in his record keeping to “politics,” he said, comparing the situation to political square-offs at the state and federal levels.

“Politics is really getting ugly,” he said.

Comptroller’s office investigators reviewed their findings and recommendations with the 14th Judicial District attorney general’s office, the report states.