Bryan Burklin, assistant director of financial and compliance audits for local governments, spoke during the County Financial Management Committee meeting on Tuesday. He said while the ’81 Act can be a little “long in the tooth” he believes it is still the best operating system for county governments.
Despite it possibly being around for a while now, Burklin still spoke positively about the ’81 financial management system.
Questions have been raised within County government and by constituents about areas of financial management. Hence the reasoning behind the state visit, Mayor Chad Graham explained.
Burklin stated emphatically that the ’81 Act is as solid as it was when Bedford County chose to operate under it a few years ago.
It should be explained that the County Financial Management System of 1981 (CFMS of 1981) is one of the two optional general law statutes of local application that a county may adopt to centralize the county’s purchasing functions.
Traditional structure is another alternative. Under this type of financial management, counties may operate under a traditional structure with elected officials such as the county executive, sheriff, trustee, register of deeds, and others, independently managing their respective departments.
The ‘81 system is similar to the 1957 acts; however, under this act the county operates under one act rather than three separate acts. Furthermore, unlike the 1957 acts, school funds are managed under this system just like all other county funds.
The ’81 Act provides for the consolidation of financial functions and establishment of a financial management system for all county funds operated through the county trustee. As well, it creates a department of finance to administer the finances of the county and all funds handled by the trustee, in conformance with generally accepted principles of governmental accounting and rules and regulations established by the state comptroller of the treasury, state commissioner of education and state law. T.C.A. § 5-21-103.
The Tennessee Comptroller’s Office representative said Tuesday there are other options for local governments but this act is still pretty streamlined and works pretty efficiently.
Before the ’81 Act, Mayor Chad Graham was director of EMS. His group had a board which he said wrote its own specs and worked its own bids.
The mayor explained during Tuesday’s meeting how the ’81 Act streamlined that process for departments like EMS. Then the boards became of an advisory capacity.
Burklin said in response, “I think the beauty of that is the EMS can still say ‘here’s what we want’ but they don’t have to go through the technical specs and all that.”
Commissioner Linda Yockey said she came onboard as a County Commissioner in 2006-the year the Commission talked about switching over to the ’81 Act. She said she was amazed at all of the purchasing going on within departments.
“The selling point to me was that the education department would be under the same umbrella as the highway department. Therefore, kind of everybody would know everything, at least the financial director would have a value on that.”
She had two questions that she simply asked the state to answer ‘yes’ or ‘no.”
She said all things considered, is the ’81 Act is the best fit for this county?
Burklin said yes but said he did want to elaborate on that.
He said as things become modernized, the County might want to consider a private act.
This would allow some provisions from the ’81 Act to be tweaked. But he said from what he knows, he doesn’t see the need to do this in Bedford County.
Yockey told Burklin she had questioned that four Commissioners, rather than professional citizens, serve on the financial management committee. She said it was explained to her this gives the Commission a direct voice in financial matters.
She asked Burklin if this is a good thing.
He explained that is fine. He said some County’s have 3 Commissioners and school board members and others have CPAs.
There were also some discussions during the meeting about conflicts of interest. Here is basically what the ’81 Act states in regard to conflicts of interest.
Tenn. Code Ann. § 5-21-121 now provides in part: (a) The director, purchasing agent, members of the committee, members of the county legislative body, other officials of the county, members of the board of education, members of the highway commission, and employees of the finance department and purchasing department shall not have a direct interest in the purchase of supplies, materials, equipment, or contractual services for the county. (b) No firm, corporation, partnership, association or individual furnishing any such supplies, materials, equipment or contractual services, shall give or offer, nor shall the director or purchasing agent or any as sistant or employee accept or receive directly or indirectly from any person, firm, corporation, partnership or association to whom any contract may be awarded, by rebate, gift or otherwise, any money or other things of value whatsoever, or any promise, obligation or contract for future reward or compensation. "Direct interest" means a contract with a person personally or with a business in which the person is the proprietor, a partner, or the person having the controlling interest in the business. "Controlling interest" means sufficient ownership in a business or company to control policy and management, including the ownership or control of the largest number of outstanding shares owned by any single individual in a busi ness or company. In addition to direct interests, those individuals named in the statute can not have an indirect interest in the purchase of supplies, materials, equipment, or contractual services for the county unless the person publicly acknowledges the interest. A person who is not a member of a governing body and who is required to publicly acknowledge an indirect interest must do so by reporting the interest to the office of the mayor to be compiled into a list that must be maintained as a public record. As used in this statute, "indirect interest" means a contract in which a person is interested, but not directly so, and includes contracts where the person is directly interested and is the sole supplier of goods or services in the county. (County Technical Services-UT.)
