A draft audit released Tuesday afternoon comes to no clear conclusions, but seems to indicate that Effingham County is out about $50,000 that was inappropriately put in a private Keep Effingham Beautiful account over a five-year period.
Commission Chairman Wendall Kessler asked certified public accountant Donald Caines of Rincon if any present or past county employees misappropriated funds.
“It does not appear so,” Caines said.
The 13-page report by the accounting firm Caines, Hodges & Co. P.C., says $70,089 in county funds were deposited into the KEB account between December 2007 and March 2013. When the account was closed in March, $12,817 left in it went into county coffers.
That leaves $57,272 in question. Of that, $4,000 came from the board of commissioners, when it was still funding the group. And some of $5,648.79 in recycling rebates from Republic Waste should have gone to KEB, but the auditor said in the report that he can’t determine from the company’s contract how much should have gone to the county sanitation department and how much should have gone to KEB.
That leaves roughly $50,000 in question.
The report also says $5,313.94 that went into the account is “cash from unverified origin.” And it says $13,320 in “vendor refunds” went into the account. The report is unclear about what the vendor refunds entail.
The report said “all disbursements (from the KEB account)… are considered undocumented and their propriety cannot be determined.”
Connie Burns was head of the county’s sanitation department until her death in August 2012. From December 2007 until her death, she also operated a bank account for KEB, which the Secretary of State’s Office lists as dissolved in July 2005.
“Ms. Burns had been operating this account with no oversight,” the report says. “Therefore, there were no effective internal controls over these activities, nor were the activities of this account reported to the County Commission.”
The audit also says $39,022.73 in scrap metal recycling checks went into the KEB account. The report says those funds “are to be deposited into the (county’s) sanitation checking account.”
At one point the report said Burns instructed one of the scrap metal recycling companies to give half of the proceeds to the sanitation department and half to KEB. The audit said she later had the checks reissued so that all of the proceeds went to KEB.
The report lists pages and pages of vendors that were paid from the KEB account during the five-year period, including department and retail stores and antique stores. There were disbursements to hotels and restaurants.
The audit did not delineate how much of the money spent might have been for conferences and legitimate KEB work.
Local affiliates of Keep America Beautiful do such things as sponsor river cleanup days, providing T-shirts and awards for volunteers.
Caines told commissioners during an hour-long workshop Tuesday that Justin Gareau, from his firm in Savannah, conducted most of the work on the KEB audit.
Commissioner Steve Mason said the audit doesn’t shed much more light on information the commissioners got in closed session last spring.
He asked Caines how much the audit cost. Caines said he didn’t know. Caines said four weeks ago, the bill was $5,300 and that he hopes the final amount will be less than $10,000.
Mason said the focus of the audit should have been how county money was inappropriately put into a private account, not how the funds from the KEB account were spent.
Caines said the intent of the report was to shed light on who knew what when, not to say anything was done intentionally or improperly.
He did say there was no indication that any improper disbursements were made from the account after Burns’ death.
County Finance Director Joanna Wright told commissioners that several safeguards are in place now that would prevent a similar occurrence in the future.
Earlier this year, when Caines’ overall financial audit of the county came up with 38 concerns about internal control issues, Commissioner Vera Jones said the issues with KEB were the most serious financial problems uncovered by the audit process.
Commissioners hired Caines’ firm to do a separate audit of the KEB funds.