Auditor flags Arkansas sheriff's expenditures; boat deal, payment of family cellphone bills questioned

A report conducted by the Arkansas Legislative Audit revealed noncompliance with state law and accepted accounting practices by the Monroe County sheriff's office, which included using funds to buy a boat from a county employee, and family members of the sheriff using county funds to pay personal cellphone bills.

The audit focused on financial decisions made within the offices of the county judge and the sheriff's office.

Legislative Audit reports examine the financial well-being and well-meaning of taxpayer-funded agencies throughout the state. It annually issues more than 1,000 financial audits, reviews and special reports that often find questionable expenditures and bookkeeping practices.

State law requires the legislative auditor to notify the appropriate prosecuting attorney of transactions that reflect apparent unauthorized disbursements or unaccounted-for funds or property by a public official or employee. Criminal charges can be filed if criminal intent is proved.

Arkansas Legislative Audit attorney Frank Arey said the Monroe County report is scheduled to be presented Dec. 13-14 to the Legislative Joint Auditing Committee. No criminal charges have been filed in connection with the Monroe County audit, and currently there is no recommendation that a prosecutor review the case.

Monroe County Sheriff Michael Neal called the audit a political attack.

"We have been conducting business the same way for three years and they never said a word about anything," Neal said in an emailed response to questions concerning the audit's findings. "Now that it's a election year we were wrote up. ... I truly believe it was a biased audit."

The audit listed several issues related to the purchase of a boat, motor and trailer for $10,500 by the sheriff's office. The audit said Neal issued a memo May 11, 2017, stating that his office was purchasing a boat for emergency use and requesting proper appropriation of funds.

Invoices indicate that the items were purchased from a non-marine vendor in Little Rock. However, a review of Department of Finance and Administration records show that the title for the items was in the name of Neal's chief deputy at the time of purchase, the audit said.

Audit manager Tim Jones said it appeared as if the sheriff's office violated ethics law by purchasing an item from a county employee without first getting proper authorization from the county Quorum Court.

"Ark. Code Ann. § 14-14-1202 states if you purchase something from a county employee, then the quorum court must pass an ordinance first," Jones said. "It appears they tried to list it as a vendor to avoid the ordinance process."

Neal said the boat was purchased through a company in Little Rock, not from a county employee. He said the boat was formerly owned by the employee but was sold close to year before when the sheriff's office bought it.

"We have all the documents to prove this, all of which was sent through the quorum court and county judge for approval," Neal said. "It was approved and we purchased the boat at that point."

The audit also noted that county funds were used by department personnel but eventually were paid back using personal funds.

Documents listed $2,936 in personal cellphone charges between January 2017 and June 2018 on the county's cellular phone account for three members of Neal's family. Neal reimbursed the county $2,911 for the charges, and stated Sept. 4, 2018, that he and his family had moved their cellphone service from the county's account to a private plan.

The audit also noted a credit card bearing Neal's name and title used the county's mailing address. The card listed in the report appeared to have been used for county and personal use, with each side paying its monthly portion at the end of the month.

Neal said the credit card and cellphone referred to in the audit belong to him, not the county.

"The cell phone and credit card are under my [social security number] and date of birth," he said. "If the bill is not paid it's my credit that is affected, not the county. So with it being my card, I can purchase any personal items I like. I did also make county purchases on the card and [the county] would add a check to the payment for their part. Same way with cell phone bill. I paid my part; they paid theirs."

Neal questioned why a local auditor was allowed to do the audit, and he said he believes the auditor had it out for him.

"I haven't had my chance to speak to the legislative audit committee," Neal said. "And I'll be filling formal complaints against her. I feel what I was written up for was petty."

State Desk on 11/21/2018

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