GATESVILLE — Point-counterpoint.

Gates County Department of Social Services (DSS) Director Colleen Turner has responded to the findings within the county’s annual audit that discovered several General Statute and Administrative Code violations within DSS, especially in regards to its Trust Fund.

Those issues were reported in the Oct. 8 edition of the Roanoke-Chowan News-Herald (“Annual audit reveals DSS violations”).

Addressing the Gates County Board of Commissioners at their Oct. 7 meeting, one where the audit was formally presented, Turner said she felt she, her department and the DSS Board are targeted as “villains.”

“We feel there has been a lack of communication,” Turner said. “Had these issues been discussed with me or my (DSS) board chairman, this could have been cleared-up prior to the release of the audit.”

In a letter of response – presented last week to the commissioners, the county manager and this newspaper – Turner stated, “Never before has a county audit taken place where there was no consultation with agency staff to discuss items of concern. In the past, dialogue and collaboration have been a part of the audit process. We believe the audit process is designed to identify both strengths and weaknesses in county policies and finances and to identify measures to strengthen internal controls when necessary. We do not, however, submit to any wrong-doing, as has been implied in the audit report and reported to the State and Federal government, the media and general public.” Within the letter were DSS’ response to the findings, in the order that they are covered in the audit report. Those responses are as follows:

The Trust Fund is not reconciled to the bank statement on a timely basis. When the account is reconciled, the unidentified errors are not properly investigated. Bank statement reconciliation is a function that was, prior to County Finance taking over the account on August 4th, assigned to a DSS employee not directly responsible for agency finance transactions (neutral/segregation of duties) and was conducted monthly. I am not aware of “unidentified errors” not being properly investigated.

The Trust Fund is not reconciled to a subsidiary listing of the trustees. Following the February/March 2009 dialogue about reconciling the account, the DSS Accounting Technician III and County Finance Officer agreed to a temporary method of reconciling each beneficiary’s ledger to the bank statement until a formal revised format could be established. To date, I do not believe a revised format has been created and the temporary format continues to be used on a monthly basis. Since this agreement was made, I have not been made aware of any problems related to this new practice pending the revision to the reconciliation form currently being used.

The Director is not duly authorized as a Deputy Finance Officer to execute checks. This account has been in existence for nearly 29 years with the DSS maintaining check-writing authority throughout those years. Countless DSS Directors, County Managers and Auditors have allowed this practice to continue. Guidance from the NC Department of State Treasurer was received by the County Manager and Finance Officer on February 13, 2009 regarding the requirement to “duly authorize” the Director as “Deputy Finance Officer.” Upon receipt of that guidance, it was the County Manager and Finance Officer’s responsibility to act – not the DSS Director or Board.

The Director possesses a debit card and uses the card for transactions that do not possess proper authorization. A debit card was obtained for the account in 2004 and used for transactions related to the beneficiaries and, in some instances, for DSS operations which were to be reimbursed by the County, deducted from the appropriate DSS budget line and reported, as appropriate, for state and federal administrative reimbursement. The use of the debit card for purposes not related to beneficiaries was ceased in November, 2008 upon the first-ever advice of an auditor or other entity. As for authorization from County Finance for purchases/expenditures, this was not required until Justin Hembree, Interim County Manager, implemented the policy in 2008. Authorization from County Finance/County Manager has never been and is still not required for purchases/expenses related to beneficiaries. A DSS Social Worker evaluates beneficiaries’ requests for purchases/expenses and authorizes them based on her assessment of the need and availability of funds after all obligations are met (rent, utilities, food, insurance, etc.). This is proper procedure under Social Security Administration policy. Again, transactions related to this account were reviewed in previous years with previous Auditors, County Managers and Finance Officer and were never raised as a concern. Had they been, practice would have been changed at that time.

The Director co-mingled professional association transactions with the Trust Fund while serving in an officer capacity of the association. When I accepted the position of DSS Director in March 2001, the agency account was already being used for transactions related to beneficiaries, some agency operations (supplies and travel), NCSSA and the Prescription Drug Fund (unsolicited donations received to support unfunded DSS assistance) and had been for many years. Receiving no guidance to operate differently by any Auditor, County Manager or County Finance Officer, this practice continued until early 2009. Upon advice of what I assume was the previous Auditor, efforts began to separate those funds and open other accounts as needed to manage those funds. A review by the Social Security Administration (SSA) that was initiated by the County Manager in March 2009 resulted in no findings of improper management of beneficiaries’ funds. The issue of co-mingling was addressed by separating out those funds not related to beneficiaries’ funds and reporting to SSA the use of a “Collective Account” that would be audited by them every 3 years, as required by SSA regulations.

Upon the death of a beneficiary of the Trust Fund, the Director did not turn over the beneficiary’s account balance to the Clerk of Court or other designee of the Estate. Had the Auditor, County Manager, Finance Officer or Commissioners afforded DSS the opportunity to respond to this concern, it would be known that the Clerk of Courts was consulted, in person by the Social Worker (SW) responsible for case management related to the Payee program, on the disposition of the deceased beneficiary’s funds. The day after the beneficiary died, the SW called the Clerk’s office and then met with the Clerk of Courts 3 days after the beneficiary’s death. The Clerk of Courts advised the SW to take care of all outstanding bills, which we proceeded to do. In addition, guidance was sought from SSA. The SW was advised to send the death certificate to stop future checks, which was done. No guidance was provided by SSA on the disposition of beneficiary funds.

After the death of a beneficiary, the Director authorized transactions and charged the transactions against the deceased beneficiary’s trust account. Following the death of the beneficiary, the SW proceeded to plan the beneficiary’s funeral with the family, using life insurance benefits to pay for the casket, flowers, and other funeral expenses. She then proceeded to take care of all other outstanding bills, including those necessary to complete significant structural repairs related to the replacement of the beneficiary and spouse’s home that had begun prior to the beneficiary’s death and per her request. Had those final repairs not been made by the Housing Committee, the beneficiary’s spouse would have continued to be homeless. In addition to the beneficiary’s funds, the spouse contributed to costs associated with the replacement out of his own pocket. Any remaining funds after bills were paid belong to the spouse, as the funds he contributed to the project were more than needed to complete the repairs/replacement. It is my understanding that some of those bills and the balance of the fund have been turned over to the Clerk of Courts by County Finance, without consulting the SW or other DSS representatives. We had not yet reached a point where we could reconcile the beneficiary’s account and meet with the Clerk of Courts to turn over any remaining funds and recommend disposition of those funds, as there remain unpaid bills since seizure of the account on 8/4/09. All outstanding transactions are complete with the exception of those transferred to the Clerk’s office by County Finance in recent weeks. It is our intent to close out these records as soon as possible and move on.

The Gates County Department of Social Services was the named beneficiary of a life insurance policy. The proceeds were deposited into the Trust Fund, rather than the General Fund. Why, when the intent for those funds was to go toward funeral expenses and the replacement of the beneficiary and spouse’s home, would they have been deposited into the General Fund? They were for use toward the benefit of the beneficiary and spouse. Any remaining funds would have been recommended to the Clerk of Courts to go to the surviving spouse after all bills and obligations were paid and repairs to the replacement home were complete. These would not ever have become county funds or agency funds. The client named DSS the beneficiary many years ago – prior to the employment of this Director, Social Worker and Accounting Technician. We were unaware that was the case until the client’s death. There are no other Trust Fund clients with life insurance policies naming DSS the beneficiary.

“We work hard to meet the every day challenges of serving this community,” Turner’s letter stated. “We do so in a manner that historically has been with the trust and confidence of the community and its leaders. We are concerned about the damage to that trust and confidence that has resulted from this lack of communication and rush to judgment. Our actions are consistently for the best interest of our clients and we will continue to meet our clients’ Social Services needs with the same compassion and family-centeredness as always. We will not be disheartened by this turn of events.” The letter concluded, “In the long run, we believe that these matters will be resolved in a manner that exonerates the DSS from any wrong-doing. It is our sincere hope that the Commissioners’ trust and confidence in the work of DSS is restored and we can move forward in a relationship that includes open communication and mutual respect.” The Gates County Board of Commissioners have scheduled a Special Called meeting at 11 a.m. on Tuesday, Oct. 20 to further discuss the audit.