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Board closes administrative review after Minor Hill utility uncovering of $103,000 theft; financial‑distress monitoring to continue
Summary
Minor Hill Utility District uncovered employee check fraud that the district said cost the city about $103,000 and the utility about $4,000. The board accepted staff findings that the district implemented controls (positive pay), hired a third‑party accountant and closed the customer complaint and administrative review while leaving the financial‑distress order in place for continued oversight.
The Tennessee Board of Utility Regulation accepted staff recommendations on Wednesday to close a customer complaint and the administrative review of Minor Hill Utility District after the utility discovered a staffer had forged signatures on checks.
Board staff said the utility helped uncover a fraud scheme in which that employee forged signatures and diverted funds. "I believe she stole around $103,000 from them and around $4,000 from Minor Hill Utility District," staff said when summarizing the administrative review.
Staff reported that the utility has taken remedial steps: it instituted positive‑pay with its bank to detect unauthorized checks, hired a third‑party accounting firm to assist with records and is moving to update audits and rate studies. Board staff recommended closing the two matters but keeping the utility under a financial‑distress order so the board can monitor audits and confirm implementation of controls.
Board members voiced concern about governance and oversight. "I would ask the staff to research whether or not we can order utility districts to be for the boards to be presented financials at their meetings," said board member Mr. Perky, noting repeated examples in which lack of financial oversight had allowed problems to grow.
The board voted to accept staff recommendations to close the complaint and the administrative review while leaving the financial‑distress status in place and directing staff to monitor the district’s progress on audits and the planned rate study.
What’s next: Staff will monitor Minor Hill’s audit completion and rate study updates and will report back to the board if monitoring identifies further deficiencies or failures to implement controls.
