About the Division
The Division of Local Government Audit is responsible for performing audits of Tennessee county governments as part of the powers and duties of the Department of Audit pursuant to provisions of Tennessee Code Annotated, Section 4-3-304.
The division director is Jim Arnette, a Nashville native and graduate of Middle Tennessee State University. Mr. Arnette was appointed director in July 2007. He has been with the Comptroller’s Office since August 1983. A Certified Government Financial Manager, Certified Information Systems Auditor, and Certified Computing Professional, Mr. Arnette is a member of AGA and has served as president of the Nashville AGA chapter and as a regional AGA Vice President.
An administrative group is located in the Nashville office to provide support to the audit staff, who are located throughout the state. The division performs various audit-related activities, which are discussed below.
Financial & Compliance Audits
The division audits 89 county governments related component units, two special school districts, and one landfill. Certified public accountants audit the remaining six counties under contracts approved by this office.
The audit staff are divided into four geographical areas with a regional office in each area: West (Jackson), Middle (Nashville), Mid-East (Cookeville), and East (Knoxville). An audit manager is responsible for audit planning and supervising in each area. The division director is in charge of financial and compliance audits and supervises the audit managers, who assign audits to auditors who work as a team under the manager's supervision. In addition, the audit managers plan and direct special audits and assignments.
Contract Audits & Research & Review
This division ensures that municipalities, schools, utility districts, housing authorities, joint ventures created by local governments, other quasi-governmental organizations, and other government-funded agencies are audited as required by state statute. Because the majority of these audits are performed by public accounting firms, the division carries out its responsibilities by approving all audit contracts and systematically reviewing all audit reports and selected audit working papers of contractors for compliance with generally accepted government auditing standards, reporting requirements and state and federal statutes.
Information System (IS) Reviews
The IS review staff reviews the automated accounting systems of county government offices and agencies. An assistant director heads this section and supervises the IS audit staff. IS reviews consist of a review of the general and application controls of a county's computer hardware and computerized accounting information systems. Findings resulting from an IS review are discussed with the appropriate officials and included in the county's comprehensive annual financial report.
General and application control reviews on computer systems and financial software applications in 89 Tennessee counties, related component units and two (2) special school districts will be performed each year.
Reviews of Funds Administered by District Attorneys General
The division conducts annual reviews of Fraud and Economic Crime Funds, Judicial District Drug Task Force Funds, and other funds administered by the district attorneys general in the state's 31 judicial districts. The scope of the review is limited to the transactions of the individual funds and does not include the overall operation of the district attorneys' offices.
This area of activity involves conducting reviews of the County Correctional Incentive Program (CCIP) in counties participating in the program. The purposes of the CCIP are to mutually benefit state and county governments by helping to alleviate overcrowding in state correctional facilities and reduce high operating costs, and to assist counties in upgrading local correctional facilities and programs. Counties participating in the program may be reimbursed at either a minimum statutory daily rate or a rate based on a county's "reasonable allowable cost" to house convicted felons. In this review, the division tests the county's records and other supporting documentation pertaining to various reports required by the program. The division reviews the largest detention facilities each year and reviews a sample of the other detention facilities while ensuring that each facility is reviewed once every six years.