Legislative auditors said Friday that more than $180,000 intended to support the Drew County Museum was inappropriately disbursed, with much of the money ending up with a former official and two other individuals.
The inquiry came after Drew County Historical Society President Thomas Gray outed the individuals, unnamed in the report, in the town square, he told lawmakers at a Legislative Joint Auditing Committee meeting.
"I had called a meeting and it was on the square of our town and I did have the judge, the city mayor and the members of both the museum commission and the historical society boards there," he said. "Of course, these two people that were mentioned were there also."
Local officials listened to Gray, reviewed the evidence and then brought the matter to Thomas Deen of Monticello, 10th Judicial Circuit prosecuting attorney, who formally requested the audit.
"When he looked at it, his comment was, 'Wow,'" Gray said.
The final report was forwarded to Deen, according to the audit.
Gray said he's spent about 12 years on the boards of the museum and historical society and originally got involved at the request of the late Rep. Sheilla Lampkin, D-Monticello. Lampkin died in July.
Sen. Eddie Cheatham, D-Crossett, who represents Monticello, said Lampkin was involved early on with the audit and was shocked at what was said to be going on.
Gray said that in those 12 years he spent on the commission and society, he had not received a detailed financial report, but the society was now holding monthly meetings and requiring documentation for any sort of reimbursement.
He became interested in looking at the financial reports when he became president of the society in 2015. A Union Bank & Trust Co. official told him that the museum account was overdrawn and had several insufficient funds charges. The audited accounts were at that bank and another bank.
He then started to look into why.
"I want this to stop," he told lawmakers. "I want people like this to quit doing this."
In total, Arkansas Legislative Audit found $182,446 in undocumented or questionable disbursements from the museum from Jan. 1, 2011, through Sept. 8, 2015.
"The Treasurer, her cousin, and Individual A received reimbursements totaling $57,753, $20,186, and $3,051, respectively. There was no documentation provided to support these payments totaling $80,990," according to the audit. The individuals are not named in the audit.
In addition, the former treasurer "misrepresented the source of funds on a deposit slip and did not maintain basic accounting and financial records," according to the audit report.
Gray said the museum owned several buildings and rented them out with the intent of earning money.
The audit showed that checks totaling $101,456 were payable to three other people -- "Individual B," her husband and her son -- for various services provided by the family.
"Although a few of these checks were for work done at the Museum, most check notations indicated they were for painting, cleaning, repairing, and cutting trees at the rental houses," according to the audit.
But interviews conducted by Arkansas Legislative Audit and Arkansas State Police revealed that "Individual B" and her husband provided few services and did not receive most of the checks payable to them and the son provided no services and received no payments. Officials also learned through the interviews that the family was paid with an unknown amount of cash. The audit doesn't say what happened to the checks that didn't go to the family of three.
To explain the cash payments, the former treasurer told "Individual B" that the museum bank account lacked funds, according to the audit.
The treasurer resigned Sept. 8, 2015. Her cousin, who served as a commissioner, resigned the same day.
During the meeting, Reps. Kim Hendren, R-Gravette; Mark Lowery, R-Maumelle; and Kim Hammer, R-Benton, said they did not agree with Arkansas Legislative Audit's practice of withholding names from their reports unless an individual is charged with a crime.
"I think the constituents of any particular area -- they have a right to know if oversight is being conducted properly or not," Lowery said. "I ask that you revisit that policy."
Legislative Auditor Roger Norman said his office is often able to determine if there's money missing and who had access to it, but not necessarily who took it.
"Someone may be responsible -- let's say head of the office -- but four or five people basically had access to it," he said. "That's part of the rationale behind that. We didn't want to infer that necessarily someone was guilty of something."
Metro on 12/03/2016