State auditor criticizes Jackson County spending
Missouri’s state auditor has given Jackson County a rating of poor – its lowest of four grades – for the way it has handled no-bid contracts, travel expenses and even Sheriff’s Office Christmas parties with prime rib and lobster paid for out of road-and-bridge funds.
The County Legislature and the office of County Executive Frank White Jr. say the county has taken steps to improve those procedures and controls.
The report is of one of several expected in State Auditor Nicole Galloway’s ongoing review of county operations. Earlier this year Galloway issued a report calling for better spending controls in the COMBAT anti-drug, anti-violence program. The County Legislature asked for the audit in February 2018, a move supported by White.
Galloway’s office keyed in on federal lobbying by Polsinelli PC, the Kansas City law firm, on “matters related to rail and mass transit.” The county has, among other things, had to get through various federal hoops to proceed with the Rock Island Trail, about half of which is now complete on the old Rock Island line in Lee’s Summit and Raytown.
The county paid Polsinelli $1.33 million from 2011 through 2017. The audit says there’s no documentation suggesting the work was periodically reviewed or put out to bid, that the county’s contracts with Polsinelli “lacked detailed requirements for any specific type of services to be provided,” that the county did not hold Polsinelli to the weekly reports of proposed legislation that the contract required, and that invoices “did not provide dates of hours worked, cost per hour, services performed, or expenses incurred.”
In response to the overall report, White’s office issued a statement saying, “I am pleased to know that most of the recommendations made involve issues that have already been addressed by the County. We will continue to work with the elected leaders of Jackson County to make additional improvements in the days, weeks and months ahead.”
The office of Legislature Chair Theresa Cass Galvin released a statement saying, “The County Legislature will continue to strengthen oversight efforts of county operations and internal controls through policymaking measures to establish best practice standards …”
The audit also says Polsinelli paid for $149,796 in “questionable and … not transparent” travel costs for county officials and then billed the county, which then put those travel costs on the books as professional services costs. The state auditor’s office also says it asked the county for those records twice in 2019 but did not get them until last month.
The audit also turned up county health levy money going for the federal lobbying, without documentation to support that action.
The audit criticizes the county for a lack of transparency.
“As a result, the county has no assurance these travel costs were obtained in compliance with county policy or were reasonable,” the audit says. “The lack of transparency surrounding these contracts and the relation payments in concerning.”
The county signed a one-year contract with Polsinelli for 2011, and renewed it for a year twice. It did the same for 2014 and renewed it again annually three times. It did not renew the contract for 2018.
“Given the magnitude of the amount spent for federal lobbying services in the contract renewal periods, consideration should be given to requiring the professional service selection process to be repeated more frequently,” the audit says. “The county also paid this firm an additional $1,034,816 for other legal services provided from 2011 to 2017 without soliciting proposals.”
Former official contract
The auditor also questions the $60,000 the county paid former County Executive Mike Sanders in the six months after he resigned in January 2016.
Sanders and others at the time said he was offering help on the county’s continued efforts on the Rock Island Trail as well as his expertise as the immediate past county executive. Sanders had years before pushed hard but unsuccessfully for a metrowide commuter rail system on old rail lines, of which trails would be a side benefit. The county spent $52 million in the spring 2016 to buy the old Rock Island tracks, with the possibility of commuter rail in mind. So far the trail is all the county has to show for those efforts.
Galloway’s office said former County Counselor W. Stephen Nixon hired Sanders without going through a competitive process and that the $10,000-a-month invoices from the Independence law firm of Humphrey, Farrington & McClain, where Sanders worked, “did not provide dates of hours worked or services provided.”
“It is unclear,” the audit says, “what if any value the county received from this contractual arrangement or why it was necessary.”
The audit also says county road-and-bridge taxes have been misspent, including Sheriff’s Office expenses of $16,013 “inappropriately paid” in 2016, 2017 and 2018, including $1,414 for tuition and related fees for a former employee to a health-and-wellness course.
The report notes that state law “restricts the use of the Special Road and Bridge Fund to disbursements for road and bridge purposes only.”
In 2018, $9.1 million from the road-and-bridge fund went to Sheriff’s Office expenses, including payroll, a practice that ended in 2019.
Both former Sheriff Mike Sharp, who resigned in 2018, and current Sheriff Darryl Forte, used road-and-bridge money for Christmas parties.
Sharp’s party in 2017 cost $5,487, roughly half from the road-and-bridge fund. There was one vendor and no bid, despite a County Code requirement that purchases of that size require bids. The party included 125 meals at $32 each with prime rib, lobster and fried shrimp. There was $300 for a DJ and $75 for a bartender.
The 2018 Christmas party, under Forte, had 130 meals at $19 each, plus $300 again for a DJ. The road-and-bridge fund covered $3,582 for that party.
“The County Legislature and County Executive should … reimburse the Special Road and Bridge Fund for costs inappropriately paid from that fund, determine if additional reimbursement is necessary,” the report says, “and ensure all future expenditures from the Special Road and Bridge Fund comply with state law.”
The 225-page audit – most of it a compilation of invoices and contracts from 2017 and 2018 – includes several summations, warnings and recommendations:
• It reminds officials that contracts have to be signed, dated and in effect before work starts and that the county needs “clear, detailed, and timely written contracts.” It says documentation is needed for the county’s bills.
• It says the county has used the same state lobbying firm for 12 years – $620,800 from 2007 to 2018 – and should review that more frequently. County Legislator Jeanie Laurer, R-Blue Springs, this year raised concerns somewhat along those lines.
• It tallies up $970,190 for outside legal help in 2017 and 2018, including $301,870 for one employment discrimination case, $235,749 for another employment discrimination case and $178,662 for cases regarding conditions at the county jail.
• It says the county’s director of finance and purchasing should do an annual purchasing report, as the County Code requires.
• “The county,” the report says, “could not provide an invoice to support payment for consulting work related to the criminal justice system feasibility study and master plan.” The county paid that consultant $285,000 in 2018. Legislators are expected to get a major update on plans for a new jail on Monday.
• “The county lacks adequate controls and procedures,” the report says, “to account for fuel used compared to bulk fuel purchased.”
• “Discontinue paying for Christmas parties, and ensure all disbursements are necessary and prudent use of public funds.”