Marion County UT Extension OfficeJune 8, 2021

June 8, 2021Marion County UT Extension OfficeDirector Dannie BradfordMarion County Chamber of Commerce Building302 Betsy Pack DriveJasper, TN 37347-3316Director Bradford:The Office of the Comptroller of the Treasury conducted an investigation of selectedrecords of the Marion County UT Extension Office, and the results are presented herein.Copies of this report are being forwarded to Governor Bill Lee, the State Attorney General,the District Attorney General of the 12th Judicial District, certain state legislators, and various otherinterested parties. A copy of the report is available for public inspection in our Office and may beviewed at,Jason E. MumpowerComptroller of the TreasuryJEM/MLC

Marion County UT Extension OfficeINVESTIGATIVE REPORTMarion County UT Extension OfficeThe Office of the Comptroller of the Treasury investigated allegations of malfeasance related tothe Marion County UT Extension Office (Extension Office). This investigation was initiated afterExtension Office officials reported questionable transactions in its accounting and bank records.The investigation was limited to selected records for the period January 2018 through March 2020.The results of the investigation were communicated with the Office of the District AttorneyGeneral of the 12th Judicial District.BACKGROUNDThe Extension Office is in Jasper, Tennessee, and serves the citizens of Marion County witheducational programs in the areas of Agriculture, Family and Consumer Services, CommunityResource Development, and 4-H Youth Development. The Extension Office is an outreach of theUniversity of Tennessee Institute of Agriculture, providing research-based solutions andinformation to the citizens of Marion County. The Extension Office receives cash and checks aspayment for participation in various programs and for services provided.Courtney Conley was hired as anAdministrative Support Assistant inJanuary2018.Conleywasresponsible for collecting, receipting,and recording all office collectionsand making deposits into the officebank account. Conley also preparedchecks, recorded the disbursements inthe financial records, opened the mail,and reviewed and reconciled the bankstatements. Conley prepared andsubmitted a monthly transactionreport to the Extension OfficeDirector for review and approval.The Extension Office terminated Conley’s employment on March 31, 2020.RESULTS OF INVESTIGATION FORMER ADMINISTRATIVE SUPPORT ASSISTANT COURTNEY CONLEYMISAPPROPRIATED EXTENSION OFFICE FUNDS TOTALING AT LEAST 39,1091

Marion County UT Extension OfficeDuring the period November 2018 through March 2020, Administrative Support AssistantCourtney Conley misappropriated Extension Office funds totaling at least 39,109.Conley admitted to investigators that she was experiencing financial difficulties and withoutthe knowledge or authority of management, used Extension Office funds to pay her personalexpenses. Investigators determined that Conley employed two schemes to misappropriateExtension Office funds as described below:1. Conley issued and cashed checks payable to herself totaling at least 15,411Conley wrote and cashed 18 checks made payable to herself to misappropriate at least 15,411 for her personal use. To conceal these misappropriations, Conley signed theExtension Office Director’s name and the Extension Agent’s name on three checks whichrequired two signatures and either the Director’s or Agent’s name on at least 15 checkswhich required only one signature, all without their knowledge or permission.Conley also altered bank statements, made false entries on check stubs and in the officeaccounting system to conceal the misappropriations. For example, in December 2019,Conley wrote a 1,029 check payable to herself for a “travel reimbursement,” signed theDirector’s name, and deposited the check into her personal bank account (Refer to Exhibit1).Exhibit 1Check Conley wrote and made payable to herself for a “travel reimbursement”.Conley posted this check as payable to the United States Postal Service for postage totaling 7.85 in the office accounting system (Refer to Exhibit 2).2

Marion County UT Extension OfficeExhibit 2Check 4515 entered into the accounting system as 7.85 for postage.Conley also used white-out and altered the entries on the check stub in the checkbook tofalsely reflect the check was payable to the United States Postal Service for postage totaling 7.85 (Refer to Exhibit 3).Exhibit 3Altered check stub in the checkbook falsely reflecting check for postage.3

Marion County UT Extension OfficeConley furthered her scheme by scanning the bank statements into her office computer andusing software on the office computer to alter the scanned statements to falsely reflect thatthe check was for 7.85 (Refer to Exhibit 4a). The correct amount of 1,029.58 is shownon the statement provided by the bank (Refer to Exhibit 4b).Exhibit 4aExhibit 4bAltered statement (Exhibit 4a) compared to the correct statementprovided by the bank (Exhibit 4b).2. Conley retained at least 23,698 in cash from deposits for her personal benefitConley improperly retained cash collections from 53 deposits totaling at least 23,698 forher personal use. Conley altered bank statements and made multiple false entries in theoffice accounting system to conceal the undeposited cash. (Refer to Exhibit 5).4

Marion County UT Extension OfficeExhibit 5Collected 202002/21/202003/05/202003/16/2020Summary of Cash Retained from Deposit by ConleyCash CollectedCash DepositedCash Retained by Conley 135.00 0.00 00540.000.00540.00415.000.00415.00Total: 23,698.455

Marion County UT Extension OfficeConley used software on the office computer to alter the deposit amounts to overstate theamounts deposited and the monthly balances to conceal the cash she withheld fromdeposits (Refer to Exhibits 6 and 7).Exhibit 6Bank statement altered by Conley.Exhibit 7Accurate bank statement provided by the bank.6

Marion County UT Extension OfficeSummary of Misappropriations by ConleyMethod of MisappropriationChecks payable to herselfCash retained from depositTotal MisappropriationsAmount 15,41123,698 39,109On June 6, 2021, the Marion County Grand Jury indicted Courtney Conley on one count of OfficialMisconduct, one count of Theft over 10,000, one count of Tampering with Evidence, andeighteen counts of Forgery.The charges and allegations contained in the indictment are merely accusations of criminalconduct, and not evidence. The defendant is presumed innocent unless and until proven guiltybeyond a reasonable doubt, and convicted through due process of law.Marion County UT Extension Office Investigation ExhibitINTERNAL CONTROL AND COMPLIANCE DEFICIENCIESThe Comptroller’s investigation revealed the following deficiencies in internal control andcompliance, some of which contributed to the Administrative Support Assistant’s ability toperpetrate her fraudulent schemes without prompt detection. The deficiencies included:Deficiency 1: Extension Office management did not separate financial duties adequatelySeparating financial duties adequately reduces the risk that errors or intentional misappropriations willremain undetected. Extension Office management did not separate incompatible financial dutiesadequately. Conley was responsible for opening the mail, receipting collections, preparing bankdeposits, recording collections in Quicken, and reconciling receipts with bank deposits. She alsomaintained custody of the Extension Office checks, prepared payments to vendors, maintainedsupporting documentation, and recorded payments in Quicken.Deficiency 2: Extension Office management did not provide adequate oversight ofoperations and did not establish internal controlsManagement is responsible for designing internal controls to give reasonable assurance of thereliability of financial reporting and the effectiveness and efficiency of operations. Providingadequate oversight and establishing internal controls reduces the risks that errors or intentional7

Marion County UT Extension Officemisappropriations will remain undetected. Extension Office management did not provideadequate oversight of operations and did not establish internal controls to ensure accountability ofextension funds as listed below. This allowed Conley’s schemes to remain undetected for morethan a year before the bank sent notification that the account was overdrawn. Specifically: The Extension Office Director failed to require adequate supporting documentation fordisbursements to verify that the funds were used appropriately. The Director did not require two signatures on checks over 1,000 as required by the UT CountyBank Account Manual. The Director failed to adequately review Transaction Reports including bank statements and checkimages. The Director incorrectly confirmed on the Transaction Report checklist that she reviewed theattached documents, although she did not.Deficiency 3: Management failed to ensure collections were deposited intact and promptlyDepositing funds promptly and intact provides accountability and helps ensure that all collections areadequately safeguarded and reduces the risks that undetected errors or misappropriations will occur.Extension Office management failed to ensure that Conley deposited all collections intact and promptlyas required by Tennessee Code Annotated, Section § 9-4-301. Conley failed to deposit certaincollections at all, and she failed to deposit certain collections for several months after receipt.Extension Office management indicated that they have corrected or intend to correct thesedeficiencies.8