Audit: Sheriff’s ledgers amiss in Saline County

The Saline County sheriff’s office used designated funds inappropriately and failed to account for thousands of dollars for at least two years, according to a state audit released Thursday.

The audit came at the request of prosecutor Cody Hiland, who was specially appointed to start an investigation into the sheriff ’s office last year. Hiland, who is Faulkner County’s prosecuting attorney, also asked the Arkansas State Police to begin a criminal investigation into the sheriff’s office related to “possible improper expenditures, a missing patrol car and alleged misconduct by employees of the office,” according to a letter the prosecutor sent to the law enforcement agency.

“We’re waiting on state police to conduct a criminal investigation, and once they’re done with that, they will send that over to us for review,” Hiland said in an interview Thursday. “At that point, we’ll make a determination if the findings rise to the level of criminal activity.”

The state Legislative Audit Division reviewed the sheriff’s office’s finances for fiscal 2012 and 2013. Audit officials presented the review Thursday to the Legislative Joint Auditing Committee’s Counties and Municipalities Subcommittee, which accepted the report. Committee members didn’t ask questions of interim Sheriff Cleve Barfield, who attended the meeting as the sole representative of the sheriff’s office.

The sheriff’s office came under fire after former Sheriff Bruce Pennington was arrested June 29 and later convicted of public intoxication and resisting arrest. After the conviction, Pennington said he would retire, but changed his mind repeatedly before submitting a retirement notice Oct. 1. The Saline County Quorum Court then named Barfield to fill in.

Pennington has admitted that, while sheriff, he used office credit cards for personal expenditures - money he said he reimbursed. Also during his administration, the sheriff’s office initially said it lost a patrol car. Sheriff’s officials later said the car was never missing but rather the vehicle identification number was simply mislabeled on an inventory sheet.

According to the audit, the sheriff’s office didn’t deposit $5,610 in revenue from inmate phone cards from Jan. 1, 2013, to Nov. 6, 2013. JoNell Mallory, the former chief deputy of finance, was responsible for purchasing the phone cards, restocking the kiosks and receiving and depositing the money collected from the phone cards, the audit states.

Mallory was given the option Oct. 4 to resign. She initially took that route but later withdrew the resignation and was subsequently fired. Now, after the firing, the sheriff’s office requires two employees to be at the kiosk when an inmate buys a phone card.

Overall in the sheriff ’s office, auditors also found 137 receipts that were voided, and the original receipts weren’t retained. Two receipts for cash - $1,140 in 2013 and $1,187 in 2012 - also were voided with no replacements.

“In addition, receipts issued for cash were voided and reissued for $210 less than the original receipts during this same time period,” the audit states.

The sheriff’s office didn’t record or deposit $5,240 in manual receipts, mostly for fingerprint and accident report fees and mostly paid in cash, according to the audit.

Pennington cashed $1,000, and Mallory $373, in checks payable to the sheriff’s office, auditors said.

“I went to First Security Bank to deposit the check,” Pennington said in an April 6 handwritten letter responding to auditors. “The bank teller told me that [due] to the fact in the memo area of the check it stated for any purpose that I didn’t have to deposit the check.”

Pennington cashed the $1,000 check and gave the money to the Saline County Fraternal Order of Police, and that was later used to buy equipment for the sheriff’s office Special Weapons and Tactics team, he said in the letter.

“The Sheriff’s office did not adhere to state laws and proper accounting procedures relating to the depositing of receipts,” the audit says.

Since October, the sheriff’s office has ordered pre-numbered receipt books to replace the existing ones and implemented a new policy for voided receipts: If voided, the original receipt must be in the book, along with a reason and approval from the employee’s supervisor.

Among the other audit findings, the sheriff’s office used $86,259 from the Sheriff’s Communication, Facility, and Equipment Fund - money raised from fees - for unauthorized purposes, according to state law. According to Arkansas Code Annotated 21-6-307, a sheriff’s office can retain 25 percent of the collected fees, but the money must be used to train operations staff; operate, equip, repair or replace existing communications equipment; purchase additional communications equipment; or otherwise improve a communications facility or system for the sheriff’s office

Instead, those funds were used for advertising, digital-ticket costs, promotional items, flooring, memberships and subscriptions, accounting software, clothing and utilities, the audit found. The sheriff’s office spent nearly 30 percent each on advertising and digital-ticket costs.

Auditors also said the sheriff’s office disbursed $10,395 to several businesses “without adequate documentation.”

Barfield has told auditors he would comply with state disbursement laws.

State auditors also reviewed Pennington’s credit-card purchases and found he charged $1,170 to the county but later reimbursed that from his campaign fund. He spent $5,338, but there wasn’t any documentation for the expenses.

Pennington used more than $2,000 for gas instead of using a fuel card and charged the county for “numerous meal and travel” costs without handing over documentation stating the expenses were business-related, auditors said.

“I ask about the use of the county credit card prior to ever using it,” Pennington said in the letter. “I was told it was OK as long as the bill was payed each month if it was used. I was also told that other elected officials did it as well as other county employees.”

The audit spurred the Saline County Quorum Court to implement a credit-card policy that spells out the uses of the county credit cards and includes provisions to take away the card if misused. Justices of the peace approved that measure last month.

Pennington also stood by his original stance that he never used campaign funds for repayment. He had been feeding his own money into the depleted account “to keep it active,” he has said.