What if you ran a business like Beaufort County is run
September 13, 2012
Imagine that you owned a business and had several hundred employees working for you. Your business is struggling. You have been having to raise your prices to make ends meet but sales are down. You start looking at what is wrong and how to turn around your business. A handful of your top employees got into the practice of making deals that committed your company resources (capital, facilities, personnel etc.) in deals that potentially carried with it enormous liability. You learn that many of those deals did not produce what they were supposed to do. In one instance you find out that one of your employees was making deals to give your business' resources to other individuals with no foreseeable return on investment. So you try to gain more management control over your business by requiring these deals to be approved in advance by your Board of Directors. Suppose further that in order to monitor how your resources were being spent you asked a director from your Board to sit on each of the management committees of the various departments in your company and report to the full Board each month how that department was doing.
We would suggest you would feel pretty confident you had adequate oversight and control of your business.
Then imagine that you learned that one of those departments (one of your largest) was in so much financial trouble you would have to dispose of the department, but found that you still retained millions of dollars in potential liabilities from the department when you sold it.
Then a few months later you found out that another department had entered into deals without your or the Board's approval and knowledge of all of the details and then you learned that most of the deals that department had made had gone bad, leaving you with hundreds of thousands of dollars of potential liability and useless resources that could not be liquidated for what you have in them. Then when you looked into it you found that the department oversight committee had members on it that were overseeing deals that those members personally benefitted from. Your oversight people had their hands in the till. And then you remember, you asked the department head to submit a report of the department's activities to you and you realize it was months late and when it did come in it was not accurate and was incomplete.
It gets worse.
You recall that a couple of years earlier your VP for Finance informed you that your largest department has gone $6.4 million over budget on a $33 million set of projects and spent over a third of the $40 million on things your company cannot use. The department had acquired more space than you can ever make use of.
Then you learn that another department filed a lawsuit to collect $350 from a former employee that ended up costing you over $5000 for lawyer bills and the employee still did not have to pay you the $350. Shortly thereafter you learn that the same department spent $17,210 installing some "Lexan" plastic window glass in one of your facilities two years ago that violated the building code and that it was going to cost you $22,378.88 to remove it and replace the plastic with metal screens that did meet the building code requirements.
All this within a time span of less than five years.
Would you wonder about whether you had done a very good job of managing your company? Would you keep the same employees or would you make some changes? Would you have the nerve to ask your stockholders to let you keep running the company?
The situation we just described is exactly what has happened in Beaufort County over the last five years.
The first situation described above was the Hospital. Commissioner Jay McRoy was the County's representative on the Hospital Board for fifteen years and watched while the hospital got into such financial trouble that it had to be sold. The same Board of Commissioners (at least a majority of five of the seven) then voted to sell the hospital for $50 million less than they were offered for it in essentially in a "no competitive bid" deal that directly benefitted some of the members of the Hospital board that voted for the deal.
The second department described was the Health Department. The head of that department entered into a contract that began on March 1, 2012. She signed it and the Board of Health approved it on July 10. It was approved by the Board of Commissioners in a 5-2 vote on September 10, 2012. The contract had been presented to the Commissioners in July but the Commissioner on the Heath Board was unable to provide accurate answers to question at that time. By the time it was submitted for approval the work had already been done and Board of Commissioners had no effective choice but to approve the contract retroactively in order to receive payment under the contract. The video below gives you more background on this deal.
The third description was the Economic Development Commission.
The fourth description was the Sheriff's Department. More specifically it related to the jail. Now remember that the taxpayers will likely have to build a new jail and all that Lexan and metal screens will become trash. The lawsuit was the one the Sheriff filed against Tony Keech.
And these are just the ones we know about.
Here's the video of the discussion of the Health Department debacle: