NASHVILLE, Tenn. -- Tennessee's Housing Development Agency was in the hot seat Monday over the excessive spending first uncovered by NewsChannel 5 Investigates.
Agency officials were summoned before the legislative committee that watches over state spending. Lawmakers said they wanted them to know that they are watching and they are not amused by what they saw.
"We've lost sight of the good that you do because of these outrageous activities that were funded through your budget," said Sen. Ken Yeager, R-Harriman.
Members of the Fiscal Review Committee began the hearing by reviewing NewsChannel 5's investigation of THDA spending. There was thousands of dollars for an outing to a local game room and all sorts of questionable activities.
Included were some costume purchases that left lawmakers like Yeager clearly disgusted.
THDA's new executive director, Ralph Perrey, immediately apologized for the spending that occurred under his predecessor, Ted Fellman.
"This was a misjudgment," he insisted. "It won't be repeated. And you are looking at the person whose responsible for making sure that is so."
But some questioned why Perrey, a former member of the board that oversees the agency, never spoke out before.
"Did you use your position as a board member to speak out and express concern about this?" Yeager asked.
"No, sir, I did not," Perrey admitted.
"I told Mr. Williams on-camera some of what I saw in his broadcast surprised me. Now, that's on me for not asking the right questions."
Rep. Charles Curtiss, D-Sparta, also questioned whether the agency's internal auditor can be counted on to blow the whistle on the executive director.
"If the executive director can actually hire and fire that auditor and that auditor sees something the executive director is doing that's incorrect, they are putting their job on the line when they go and report that," Curtiss said.
Making the auditor independent may require a change in state law.
But the committee's chairman said this day was to let housing officials know lawmakers will be watching how they spend the public's money.
"We're accountable for that and everything should be transparent when it comes to state taxpayer's money," said Sen. Bill Ketron, R-Murfreesboro.
The Fiscal Review Committee really began a force on Capitol Hill when it held hearings on what we uncovered about the University of Tennessee president's misuse of a state plane, as well as all sorts of other questionable spending.
Lawmakers said the lesson learned in that case is that internal auditors are only effective if they are truly independent -- and that's what they seem to be learning in this case as well.
Perrey tells NewsChannel 5 that, when THDA's board meets on Tuesday, he'll be speaking to the controversy and outlining what he's doing to make sure this never happens again.