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Resident warns Sumner County commission that invoking 1981 act could force restatement of 12 years of reports
Summary
A Sumner County resident told commissioners during public comment that applying a 1981 financial-management statute instead of the 2012 Financial Management Act could require restating 12 years of annual reports, potentially exposing the county to investor claims and credit risk.
Charlene Allmiller, a Sumner County resident, told the Sumner County Commission during public comment on June 5 that applying an older 1981 financial-management law could force the county to revise as many as 12 years of annual financial reports and expose the county to securities litigation.
“I do think that if you guys do the 19 81 act, then there's a concern that 12 years of the annual reports will need to be re revised and restated, which could put us in at issue with our debt,” Allmiller said. “You are held responsible if you have bonds issued in the securities market to make sure that your annual reports are materially stated correctly.”
Allmiller said she believes the 2012 Financial Management Act applies and that the Tennessee Comptroller had told her the same. She told commissioners that if the 1981 act is pursued, investors could argue the county materially misstated prior reports and seek to unwind or challenge outstanding debt, which could harm the county’s credit rating. “Even though you're the county government, you are still, under securities litigation or securities act, the 1933 act and the 1934 act,” she said.
Allmiller recommended that, if the commission proceeds with actions requiring hiring or searching for a finance director, the county should recruit locally for someone with Tennessee accounting experience rather than conducting a national search. “I do highly recommend that you guys just look locally,” she said, and added that spending “up to $60,000” on a search would be acceptable if it produced qualified local candidates.
Why this matters: Allmiller framed the question as one of legal and credit risk. If the county were required to restate multiple years of audited financial information, bondholders or other investors could assert claims under federal securities laws and rating agencies could react to revised disclosures.
The remarks came during the meeting’s public-comment period; the commission did not take formal action on the substance of Allmiller’s comments at that meeting. The commission’s discussion of the “1981 act” remained under old business and commissioners indicated they wanted to proceed through budget work first before further action.
Authorities referenced in comment included the 1981 act (referred to in the meeting as the “1981 act”), the 2012 Financial Management Act, and the federal Securities Act of 1933 and Securities Exchange Act of 1934; Allmiller also referenced advice she said came from the state comptroller.
No vote or directive: Commissioners did not adopt any resolution or motion tied to Allmiller’s comments during the June 5 meeting; her remarks were recorded as public comment and the commission moved on to other agenda items.
