Comptroller staff urges same-day repayment of interfund transfers, recommends corrective action for Mason

Sheila Reed of the Tennessee Comptroller—s Office presented the Town of Mason with an audit history covering 2015 through 2025 and an interfund history through June 30, 2025, and told the board the town should restore interfund transfers the same day they are made. Reed said Tennessee law requires water, gas and sanitation funds to maintain the integrity of their accounts and should not be used for general operating payroll. "When money is transferred, it needs to be put back the same day," Reed told the board.

Audit staffer Adam Tschida recommended the town adopt formal policy and procedure documents for internal controls, shared-cost allocations and a corrective action plan to prevent repeat problems. Tschida also urged the board to create a budget calendar and stronger internal controls to reduce the risk of future misallocations.

Interim Town Administrator Terry Leggett said representatives from the state comptroller—s office are ensuring processes are followed and that staff will pursue the recommended steps. Several aldermen asked for clearer fund accounting: Alderman Virginia Rivers asked the administrator to separate restricted monies from general fund balances and to report back with numbers at the next meeting.

The presentation framed the town—wide concern about liquidity: Reed and Tschida emphasized that, absent internal controls and timely interfund repayment, routine transfers can become de facto operating loans that jeopardize enterprise fund integrity. The board did not take a formal vote on an immediate policy change during the meeting; staff said they would return with proposed policy language and corrective action steps for future consideration.