Audit: Storm funds used to buy vehicles - Ford Forums

GMACK24 · 04-19-2005, 06:25

Audit: Storm funds used to buy vehicles
By JAMIE PAGE
jpage@jacksonsun.com
Apr 15 2005

A look at last fiscal year's Disaster Relief Fund - which was only for items relating to damages from the May 2003 tornadoes - shows three county vehicles were traded for newer ones for top officials using more than $30,000 from the fund. But none of the vehicles was damaged, according to a state audit of Madison County government.

Photos by JAMIE PAGE/The Jackson Sun

About $7.53 million was charged last fiscal year to the Disaster Relief category in the General Fund. It was established for things such as storm-damaged equipment and other May 4, 2003, tornado-related expenditures to be reimbursed by county insurance and Federal Emergency Management Agency funds.

Neither the county mayor or sheriff denies that their trade-in vehicles were undamaged, and both concur that they were charged under the wrong fund. The Emergency Management director hadn't yet seen the audit when contacted by The Jackson Sun.

The audit showed the county traded undamaged vehicles to make the following purchases under the disaster fund, with the amount paid after trade allowance in parenthesis:

A 2003 Ford Crown Victoria ($15,988), slightly used, was purchased in May 2004 for County Mayor Jerry Gist with no trade-in.

A 2004 Ford Expedition ($9,449) was purchased for Sheriff David Woolfork in April 2004. The new SUV was bought with an $18,125 trade allowance for a 2001 Chevrolet Tahoe, totaling $27,574.

A 2004 Ford F-150 Pickup ($4,838) was purchased in June for EMA Director Marty Clements. The new vehicle was bought with an $8,500 trade allowance from Mayor Gist's old county mayor's car - 2001 Buick Park Avenue - and a $1,000 trade allowance from a 1996 Ford Crown Victoria previously used by the EMA Department, totaling $14,338.

Total: $30,275. (Only the amounts in parenthesis were used from the disaster fund.)
The County Commission approved the budget amendment last year for the vehicle purchases, which stated that it was being done with administrative funds from FEMA.

Republican Commissioner Mike Nichols said he was unaware of it until the audit came out. When he heard the vehicles were charged to the Disaster Fund, ''I couldn't believe that happened,'' he said. ''And the low dollar figure tells me they traded in very high-dollar vehicles.''

Nichols, a 15-year commissioner who chairs the financial oversight committee, said the vehicles should have been requested under capital projects. Capital funds are set aside for things such as building construction, equipment purchases and road projects, and are listed in the budget and voted on by commissioners.

''Those three vehicles were never brought up,'' Nichols said. ''This was something done without commissioners' knowledge, that I'm aware of.''

In a separate audit finding under the county mayor's office, the disaster fund was found to have been overspent by $278,743 since the extent of 2003 tornado expenses was difficult to estimate.

Mayor Jerry Gist said the three vehicles were expenses approved by FEMA before they were purchased, and the money used to trade them was FEMA administrative funds, which covers such uses. When FEMA sends funds to a county after a disaster, a small percentage is generally added as administrative funds. It can be used for a variety of things related to administering the grant.

''FEMA said it was OK to use it that way,'' Gist said. ''They never had a problem with it. Some commissioners have been the ones that have had emotional distress about it. The auditor is just saying that it should have been broken out into a separate line item out of disaster money.''

As it is now, the county picks up administrative costs inhouse, Nichols said. ''I wasn't aware of any administrative fees from FEMA being taken off,'' he said.

''I'm sure all of those vehicles were used in tornado recovery, but I could also use the same scenario with Highway Superintendent Fred Bowyer,'' Nichols said. ''His vehicle was used in tornado recovery in some ways, but no vehicle was bought for him.''

EMA Director Marty Clements' county pickup he was driving before the storms was totaled when the tornado caused a communications tower to fall on it. The EMA car that was traded for his truck had 180,000 miles and was due for an overhaul, he said. However, none of the trade-in vehicles was damaged.

A May 14, 2003, letter from the mayor's office to all county department heads directed departments to keep all storm-related purchases separate from standard purchases. Gist asked in the letter that all storm-related purchases be listed and purchased under specific account numbers, which were listed on a separate sheet. One of those listings was ''motor vehicles.''

Sheriff David Woolfork said he thought that included any purchases during that time, including trading an undamaged vehicle. Woolfork said it was essentially the confusion that follows having a natural disaster and hearing different instructions from the county's insurers that caused the error.

''The auditors were just saying that it shouldn't have been purchased out of that certain fund,'' Woolfork said. ''But you have to remember we had a tornado, we were purchasing things, and the auditors disagreed with the way it was done.''

Gist said the accounting error, along with other audit findings, ''exemplifies the need for centralized accounting.'' The county recently adopted a form of centralized accounting, which will bring the financial management of all county departments under one roof to manage the county's $154 million budget.

''Most of the findings have to do with accounting procedures with internal line items, where a CPA would be aware of those standard accounting principles,'' Gist said.

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- Jamie Page, (731) 425-9643

Disaster Relief Fund money was used to buy a 2003 Ford Crown Victoria for Madison County Mayor Jerry Gist (top), a 2004 Ford Expedition for Sheriff David Woolfork (center) and a 2004 Ford F-150 for Emergency Management Director Marty Clements (bottom). However, none of the vehicles being traded for the new ones was damaged in the May 2003 tornadoes.

About the series

This series of stories looks at findings from Madison County's most recent audit by the State Comptroller's Office. The audit is for the fiscal year ended June 30, 2004.

About this case

Department: Office of Madison County Mayor Jerry Gist

Audit findings: Three undamaged county vehicles were traded for newer ones for the county mayor, sheriff and emergency management director, using more than $30,000 from the Disaster Relief Fund last fiscal year. The fund was established only for items relating to damages from the May 2003 tornadoes. The vehicles were charged to the wrong fund.

Resolution: A new line item should have been created for the vehicle purchases, Gist said. He said he will ensure that such future purchases are placed in the proper category. Commissioner Mike Nichols said the vehicles should have been considered entirely separate from any tornado funds, and they should have been considered only among other capital projects.