McMinnville Water and Wastewater Department has been investigated by the Tennessee Comptroller of the Treasury.
“You trust an employee and they take advantage of the situation,” said city administrator Bill Brock, when asked about the report’s findings released Friday.
Department officials notified the Comptroller’s Office after they became concerned about certain relationships and practices in the acquisition of specific chemicals.
Per the state’s findings, from June 2013 to September 2015, a former employee was responsible for ordering chemicals totaling $46,882 from a company owned by someone with whom he had a close personal relationship. These chemicals were used to unclog part of the city’s sewer system.
The investigation resulted in the termination of the city employee, whose name is being withheld.
“This personal relationship created the appearance of a conflict of interest,” said Justin P. Wilson, Comptroller. “It was not possible for department management to ensure that either the motivation for selecting the vendor as a supplier, or the volume of purchases from that supplier, were purely in the city’s best interest."
Wilson continued, "The volume and cost of chemicals purchased by the department increased significantly during the time the former employee was purchasing from the vendor with whom he had a personal relationship.”
“The most significant increases occurred during calendar years 2014, 2015, and 2016, the period that the department employee was purchasing primarily from the vendor with whom he had a personal relationship,” said Wilson. “Department management failed to adequately monitor, consider, and investigate the increasing cost. In addition, officials failed to determine if the chemicals used were effective, or to explore the availability of other chemicals, methods, or systems to achieve the desired effect at a more efficient cost.”
Even though the department employee had no formal ownership in the chemical company, the personal relationship between the employee and the vendor created the appearance of a conflict of interest. Wilson said that should have been avoided.
“Department officials discharged the employee from his job in June 2016,” said Wilson. “Government officials hold a position of public trust and therefore must strive to hold themselves and their employees to the highest standards. Officials should not engage in any action, whether specifically prohibited by statute, regulation, or policy, which might result in or create the appearance of private gain, preferential treatment, or impeding government efficiency.”
The vendor was on the approved vendor list. However, said Wilson, officials failed to evaluate vendors adequately.
“Such an evaluation would not only identify the appearance of a conflict of interest, but would assess the ability of the vendor to safely and reliably provide goods and services. Officials recently found that some of the chemical companies using during the period January 2011 through June 2016 failed to provide Material Safety Data Sheets, which are documents that contain information on potential hazards (health, fire, reactivity, and environmental) and how to work safely with the chemicals.”
Brock says changes have been made to how items are purchased and the vendor evaluation prior to being placed on the list.
“We have made the changes as suggested by the comptroller,” said Brock. “We’ve made changes to purchasing chemicals and any other items. It slows down the process for purchasing items, but that’s OK as long as it prevents something like this from happening in the future. We’ve also made changes to reviewing vendors before adding them to the approved list.”
The city’s steps toward fixing the problem met Wilson’s approval.
“It’s vital that government officials maintain their fiduciary responsibility to their citizens and customers,” he said. “I am pleased to see McMinnville leaders are taking steps to develop a better system for scrutinizing and evaluating vendors.”
The investigative report can be found online at http://www.comptroller.tn.gov/ia/.
Flood of spending
• 2011 -- $7,553
• 2012 -- $8,527
• 2013 -- $10,434
• 2014 -- $23,921
• 2015 -- $27,420
• 2016 -- $24,235