IDB catches Audit Committee's gaze

By MIKE WEST/ Courier Editor

Cannon County Audit Committee members took a look at budgetary issues Thursday (May 2) faced by the Industrial Development Board in the past.

"We have a lot of material that the new IDB should address," said Audit Committee member Pat Sissom.

County Executive Mike Gannon said he is willing to work with the committee to resolve those issues.

The new IDB was selected last October by County Commission Chairman Bob Stoetzel to deal with the problems of the past.

Gannon said the former IDB wasn't inactive, but that it did take action without a quorum present.

The former board had "too many members," Gannon said. Out of the 12 appointed members only three or four were very active, he said

The new IDB has only seven members with all of them newly appointed except IDB chairman Randall Reid.

Audit Chairman Glenn Steakley turned over the discussion to Vice Chairman Gary Hancock because his former employer was associated with the IDB. The meeting was part of an ongoing series of sessions held with various county departments over conclusions reached in the 2012 audit.

One of the issues highlighted by the recently completed state audit of Cannon County was finding 04.02 which deals with the County Executive and states "An industrial development loan was not authorized in accordance with state statute."

The finding states, "During the year, the Cannon County Industrial Development Board entered into a loan agreement with the Cumberland Area Investment Corporation on behalf of the county to borrow $300,000 for the purchase of land and the construction of an industrial building. The proceeds of this loan were deposited into the Industrial/Economic Development Fund, and the loan is being repaid from the General Debt Service Fund. This loan was not approved by the County Commission or the state director of Local Finance, as required by Section 9-21-408, Tennessee Code Annotated."

The audit recommended: "All debt obligations of the county should be approved by the County Commission and the state director of Local Finance, as required by state statute."

A similar finding, 05.02, dealt with two other industrial development loans that were not issued in accordance with state law and were not approved by the County Commission.

"It is grievous to me that the money we have lost shouldn't have been lost," Stoetzel said.

"We have asked the district attorney (Bill Whitesell) to look into it and he, in turn, has asked the state comptroller to look into it," the county chairman said.

When IDB chairman Reid began to recite a history of the board's relationship with the county executive, Audit committee vice-chairman Gary Hancock told him "We have all your minutes and have gone over them at length."

Instead, Audit committee member Ed Sissom asked Reid how IDB members will be replaced once the panel is completely independent from the County Commission.

"When we first met it was decided that two of us would rotate off the board next year," Reid said.

Audit chairman Glenn Steakley complemented the new IDB.

"You've mad a lot of progress. You've plugged a lot of holes," Steakley said, adding that he didn't understand why the problems with the IDB went on so long without someone saying "hey, we've got a problem."

Reid said, "the short answer is no."

"I didn't even know we had a budget," the IDB chairman said, but eventually he began a hard look at the IDB's dealings.

"We have uncovered some things that seem crazy," Reid said. For example, they discovered two companies renting from the IDB had never paid their power bill.

"This has been one of the most gut-wrenching experiences of my life," Reid said. "We've been sidetracked for 11 months and now we are getting back to the business of helping industries to locate here."