Hundreds of thousands of dollars in federal disaster aid are unaccounted for in Morgan County, according to a state audit that harshly condemned the county’s financial controls.
The audit of Morgan County Fiscal Court, released Monday by outgoing state Auditor Adam Edelen, found evidence of “waste, fraud and abuse” in the aftermath of a 2012 tornado that devastated the area. The audit found the possibility of abuse was so high it could not rely on financial records from the county or even form an opinion about the county’s finances.
While the audit doesn’t directly name former Judge-Executive Tim Conley as the individual who was allowed to “manipulate and misappropriate funds,” it does accuse Conley of abusing his power and the Fiscal Court of creating an “environment of very little oversight.”
Conley, who pleaded guilty in 2014 to mail fraud in a scheme in which he took $130,000 in kickbacks from a contractor, declared a state of emergency in Morgan County after the March 2012 tornado.
That state of emergency remained in effect for almost two years after being renewed by the fiscal court. The audit said that allowed Conley to use emergency authority to enter into contracts without following bidding procedures. The fiscal court didn’t have the authority to extend the state of emergency, the audit contends.
In addition to allegations of abuse, the audit found Morgan County has about in $954,936 outstanding expenses, though pending lawsuits could mean even more could be owed.
Among the evidence, the audit found the fiscal court erred by:
▪ Using about $117,000 in Federal Emergency Management Agency and state funds to build a swimming pool concession stand.
▪ Not properly accounting for $143,949 spent on debris removal after the storm.
▪ Not following federal regulations for contracts, with six instances in which contracts involving about $779,000 in federal aid didn’t include enough information and three instances involving about $240,000 in which there were no contracts.
▪ Not properly approving two FEMA expenses totaling about $265,000.
▪ Not creating a lease agreement for $13,500 in temporary storm relocations.
Judge-Executive Stanley Franklin, who took office in January 2015, said in response to points in the audit that he would “not sign any checks that are not accompanied by sufficient and appropriate supporting documentation.”
The audit will be referred to the state attorney general’s office, the FBI, the state Department of Military Affairs and the U.S. Department of Agriculture, a news release said.