SBOA audit shows Community Crossings Grant fund overspent by $448k

The State Board of Accounts audit of Owen County’s 2019 financials indicated that five funds had an overdrawn, negative cash balance in December of 2019.

This included $448,943 for the Community Crossing Street Grant fund. Other funds impacted include Payroll Clearing, EMS Building Project, Stop Violence Against Women and Emergency Prepare Health 2020.

Commissioner President Gary Burton and Highway Superintendent Greg Melton addressed the finances and provided an explanation as to why a grant fund such as Community Crossings would be overdrawn.

Community Crossings is a state grant that provides funding with a local match component to repair municipal roads, whether that be for a city, town or county. The application involves a uniform rating of the road’s current conditions. For Owen County, the local match is 25 percent of the cost of the repair. The grant dictates which roads need to be worked on and how much was allocated for the repair.

In 2019, Owen County was awarded $933,929.25 in Community Crossing’s Grant money. The roads included with the grant were: S 50 E from Cedar Lane to County Line, E 850 N from McFarren Road to Stone Mountain Road, McFarren Road from Childers Road to E CR 1000 N (Fidler Road), N 275 E from McCullough Road to Childers Road, Hancock School Road from SR 231 to Patricksburg Road, Beamer Station Road from 850 W (White Hill Road) to 800 W (Garrard Chapel Road), Porter Ridge Road from SR 43 to Adel Road, Ponderosa Road from S Cataract Road to .988 miles west and Ponderosa Road from Cunot Cataract Road to south for .916 miles.

Financial records for the fund line do not show any matching funds being transferred to the line. All of the contracted work for the grant was performed by E&B Paving.

“No money in this county can be spent unless it is approved by the county council. You cannot overspend because every dollar is appropriated by the county council,” Burton said. “The bills have all been paid, that was with E&B.”

Burton continued.

“What it amounts to is instead of paying it out of the highway budget, she [former county auditor Patty Steward] spent the highway’s money somewhere else and then when these bills came due, she ended up paying it out of general fund, which made it look like the highway still owed it. Internally, on paper it’s just a swap. We don’t owe anybody any money.”

Burton said that the highway department can have up to 30 years to pay that money back to the general fund.

“It’s the auditor’s fault that all this happened, not his fault,” Burton said, pointing to Melton.

Part of the issue, Burton said, was a broader access to the Low financial system.

“Patty Steward the auditor and Diane Stutsman the treasurer were the only two that had administrative passwords to lock and unlock the LOW system for the departments. That’s how they run their budget. The system was always down,” Burton said.

He then asked Melton if he had access to Low in 2019 and 2020.

Melton said no and provided emails of his staff requesting financial reports from the auditor’s office.

“So all the departments from EMS to EMA to the Clerk’s Office to the Recorder had no access to our financial records. It would be like you having a bank account and not having a clue how much was in your bank account,” Burton said. “So you’ve got a check register and you keep track of your checks that you spend, and you don’t have to ask anybody because you know. But if the bank and you aren’t the same, and you call the bank and say, ‘How much do I have in the bank,’ and they’re going, ‘Well our systems down right now. I can’t tell you, but you’re okay.’ So you go ahead and keep writing checks, and that’s what these people were doing, not just him. The Sheriff’s department ran into the same thing. They were $160,000 overspent in payroll.”

Access to the financial system changed in 2021 with an ordinance from the commissioners. That ordinance allowed for the council president and the commissioner president to have administrative passwords to the Low system so employees could not be locked out of it.

“Also, all commissioners and all council now have full access to our financial records. Never had that ever happened before until 2021,” Burton said. “Since that’s been passed, our employees have never not had access to LOW.”

“We used to actually get our information on a sticky note. It used to be really bad, but you know what, you believed it when you were given that information,” Melton said.

Burton claimed that Steward used money from other funds to pay bills and then replenished the money when various disbursements came in.

“We forgot and we lost track of where all our money was at and who paid what and who did she owe. That’s what happened,” Burton said. “Our offices had no idea. If he has a 2.7 million dollar budget and he gets a sticky note that says oh you’ve still got a million dollars in there but he doesn’t even have $500,000 he’s going to spend the million.”

Melton also added that the commissioners wanted to pave County Line Road that year as well as a few other things which were approved because they were told in a meeting that they had the money to do so.

“There was never any money to do it because they didn’t have the right information,” Melton said. “When you’ve got a set of commissioners that believe they’ve got X amount of money and it will pave a road, in the state the county’s roads are in, they’re going to say pave the road all day long.”

“Sure we are,” Burton added. “And I tell people this all the time, if it was my choice, I’d pave every road in the county. You know why? I wouldn’t get any phone calls anymore. He wouldn’t get any phone calls. Everybody would be happy, right? All we’d do was mow grass and cut the brush back off the sides of the road, stuff like that… But it doesn’t work that way.”

“I did tell them the money wasn’t there, and I was told I was wrong,” Melton said.

Former auditor Steward did provide the following comment concerning the issue and the allegations against her: “The auditor’s office receives the invoices from the highway department and is coded by the highway department. We pay the invoice as coded. I can’t help if they coded more than what was awarded for the project. I know I was not perfect, but it was not all my fault. The highway [department] kept spending money even when we said they didn’t have it. Mainly, we coded as they said, and they knew their budget.”

This article originally appeared on Evening World: SBOA audit shows Community Crossings Grant fund overspent by $448k