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Wilson County audit committee accepts report after finance director details vendor fraud tied to IT director
Summary
The audit committee accepted an unqualified audit opinion and corrective actions after the finance director described three material audit adjustments and a fraud investigation involving payments to a vendor tied to the county’s former IT director; officials referred the case to the district attorney and sheriff.
The Wilson County audit committee voted unanimously to accept the county’s audit findings and recommended corrective actions after the finance director presented an unqualified audit opinion and described material errors and a fraud investigation tied to the information technology department.
The finance director told the committee the auditors’ opinion page states the county’s financial statements “present fairly in all material respects,” an unqualified opinion auditors and officials seek. He then detailed three material audit adjustments. The first involved a $2,128,210 FEMA payment for West Wilson Middle School that had been recorded in the wrong fund (initially recorded in fund 151 instead of rural debt service fund 152); a correcting transfer was posted twice before the error was caught in the audit. The second related to capital-project accounting for state fair proceeds that the director said had been budgeted in fund 189 while the cash remained in fund 171, producing a discrepancy (transcript records the adjustment amount with ambiguous formatting as 3,396,96247). The third was a late invoice that should have been recorded as an accounts payable at fiscal year end but was paid in July and omitted from year-end liabilities.
Committee members pressed the director on controls and said the auditor’s finding did not identify exploitable information-system vulnerabilities; the director said the items have been corrected and that IT auditors will return to verify remediation.
Separately, the audit report and the finance director described a fraud and conflict-of-interest finding involving payments to a cybersecurity vendor linked to the county’s information technology director, Kenneth H. Hammonds Jr. The finance department filed a fraud report on Aug. 7, 2025, saying five payments to the vendor totaled $31,210. The director said his staff’s review—led in part by Lauren Breeze and assisted by Aaron Wilson—found that the vendor’s filings and website linked ownership to Hammonds. County officials notified the district attorney general and the Wilson County Sheriff’s Department; Hammonds was terminated Sept. 15, 2025, and a Wilson County grand jury returned an indictment Nov. 17, 2025, charging him with theft over $60,000 and official misconduct. The finance director said the investigation was ongoing at the time of the report and some county-owned equipment had been recovered and was in sheriff’s department custody.
The director described procurement and asset-management weaknesses that allowed the fraud, saying Hammonds at times initiated and approved his own purchase orders in violation of county policy requiring two signatures. He said the county will strengthen internal controls by enforcing two-signature rules, improving vendor vetting (reviewing Secretary of State records and vendor addresses), and implementing inventory software and tagging for sensitive computer equipment (items with original purchase price of $300 or more) plus random spot checks.
During discussion members raised questions about prior inventories and how older machines with tags had been substituted for missing equipment; the director said more technical reviews by staff, including Aaron Wilson, revealed substitutions and helped recover assets. The director took personal responsibility for the material accounting adjustments, saying, “that is 110% my fault,” and outlined corrective actions recorded in the audit report.
After discussion a committee member moved to accept the findings, recommendations and corrective actions; another seconded and the committee approved the motion unanimously. The committee noted prior minutes had been approved by the county commission and adjourned.
Authorities explicitly referenced in the presentation included a Tennessee statutory prohibition on officials having a direct interest in county purchases (discussed in the audit report as "section 5-21-121, Tennessee Code Annotated"), and the audit report itself (corrective action pages referenced in the presentation).
