Investigation finds more issues at South Fork Utility
BRISTOL, Tenn. (WJHL) — The Tennessee Comptroller’s Office has found more money-related problems with South Fork Utility District (SFUD), less than two years after an investigation that led to the resignation of its manager.
PREVIOUS: Comptroller finds potential conflicts of interest totaling $1.6M at Bristol utility
The water district that serves about 3,400 customers saw its board turnover and Garry Smith resign as manager as the Comptroller’s Office (TCO) pressured the utility to get its house in order following the April 7, 2022 release of the first investigation. That probe found records showing what the state called “questionable payments” paid from SFUD to Smith, or companies he had an ownership interest in, totaling almost $1.7 million between May 2018 and June 2021.
Smith resigned in December 2022.
Tuesday, the comptroller released the results of a separate investigation that focused on a separate, unnamed SFUD employee. That investigation found that “The SFUD made questionable payments to an employee’s business totaling at least $148,277.50.”
The TCO report says the unnamed employee told investigators he started the business “for the sole purpose of employing his father to work as a heavy machinery operator” for the district. He said he started a separate business “at the recommendation of former SFUD officials…”
The business’s only payments came from SFUD for work allegedly performed by his father and were routed straight to his father. The district gave the employee an IRS form 1099 for calendar years 2020 through 2022. Investigators “question why the employee’s father was not hired as a SFUD employee or directly by the SFUD as a contractor,” the report says.
While there were invoices for “most payments,” the report said those “lacked sufficient detail to determine the scope of work performed.”
An invoice included in the report shows a date and under “ordered” says “30 hours.” Under description it says “1 man fixing leaks.” Price is shown as $45.00 for a total of $1,350.
The TCO report noted that because the payments didn’t come through the normal payroll system, they weren’t subject to income tax, social security or Medicare deductions.
Former Bristol, Va. school burns Tuesday
“Full-time employees should not be compensated by SFUD as independent contractors in addition to their regular pay,” the report states.
It adds that the SFUD “should maintain sufficient supporting documentation for disbursements detailing the purpose of the transactions, the scope of any work performed, and authorization for payment.”
The payments totaled just under $60,000 in 2020, more than $67,000 in 2021 and $20,835 in 2022. SFUD officials indicated they have corrected or intend to correct the findings.
For the latest news, weather, sports, and streaming video, head to WJHL | Tri-Cities News & Weather.
