City officials in Sweetwater, Tennessee, were regularly dining and celebrating at city taxpayers' expense, tallying almost $133,000 in questionable spending on city credit cards and expenditures from 2014 to 2023, according to a state comptroller's investigation.
The questionable spending includes $71,700 in food purchases, according to the report about the city, just northwest of Athens, Tennessee.
Sweetwater did not have a policy governing the purchase of food, and city officials frequently dined at restaurants or food trucks in Sweetwater or nearby cities. Notes on receipts referred to meals in celebration of employees' birthdays, retirements and holidays. Meals also were purchased for city employees volunteering or working at city events, such as festivals and parades. Investigators said officials should study the IRS tax guide on fringe benefits regarding the tax implications of regularly providing meals to employees.
Investigators identified $36,000 in purchases unsupported with written approval, receipts or invoices, and other relevant documentation such as packing slips, the report said. There was also $10,300 in questionable purchases of equipment and supplies such as a knife, photos, health and personal hygiene items, personalized stationery, decorative wooden serving boards and essential oils and diffusers.
The city recorder during the investigative period, Jessica Morgan, told investigators she used a personal membership to buy five diffusers for city hall employee desks and the boardroom.
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The city recorder's responsibilities included serving as secretary to the commissioners, maintaining meeting minutes, serving as city court clerk and overseeing the city's finances, including collecting property taxes, writing grants, budgeting, payroll, purchasing and record-keeping, according to investigators. Morgan, who became city recorder in 2009, has since been named city administrator, a newly created position that supervises the city recorder and takes on the multiple duties that were previously assigned to that office.
Also, there was nearly $9,900 in questionable planning, development or tourism expenditures including a dry-cleaning service, a purse, a necklace, boutique items, gift cards, tickets to events and hotel stays in Sweetwater, the report states. Officials made another $4,200 in questionable gift purchases and purchases coded to the mayor's or the commissioners' contingency accounts. There was also $655 in questionable travel expenditures, including one commissioner's stay at a motel less than an hour away from Sweetwater.
Investigators said a total of $2,600 in taxes or fees were associated with the questionable purchases.
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Investigators also questioned a city "employee payback policy," which allows employees to purchase items they want for their job and then pay back the city through authorized payroll deductions, the investigative report states. This accounts receivable account - nicknamed the "gun pay" account - included questionable purchases totaling at least $34,000 between December 2014 and June 2023. Investigators said this practice also increases the risk of error, fraud, waste or abuse in several areas.
In a statement, city officials said they are reviewing the findings and taking steps to address them.
"While the report makes only two findings, neither of which are criminal, the city of Sweetwater takes this review very seriously," city officials said in a statement.
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"The report recommends a few internal control policy changes, several of which have already been implemented and adopted by the city of Sweetwater," officials said, noting they are happy the matter is closed. "We will now take time for internal review on additional procedures and policies to ensure continued public confidence."
The results of the investigation were shared with the district attorney's office.
"Our investigators have noted multiple deficiencies within the city's financial and business operations that must be addressed," Comptroller Jason Mumpower said in a news release on the investigation. "The city should ensure it has adequate procedures to ensure all purchases are approved, documented and appropriate. Sweetwater officials must also establish adequate written policies for items like food and gifts."
Contact Ben Benton at [email protected] or 423-757-6569.