Audit finds problems in Country Corner

Robert Smith

The office of state auditor and inspector Cindy Byrd last Friday publicly released its report on an investigative audit of the Country Corner Fire District for the period July 1, 2015, to June 30, 2017. The report says, in part, that Country Corner incurred $303,875 of debt without voter approval and improperly supplemented its ambulance service with $68,144.42 of money that had been restricted to use by the fire service.

State investigators performed the audit at the request of former Osage County District Attorney Rex Duncan. The report of findings is directed to current Osage County district attorney Mike Fisher, who succeeded Duncan in office as of early January.

Fisher said Monday that he had read the report and had been in contact with the Oklahoma State Bureau of Investigation, but he also wanted to talk with Byrd, the auditor, before making any more-detailed comment.

Osage County commissioners and representatives of Country Corner talked publicly about the ongoing audit and potential findings in a meeting last November at the county courthouse in Pawhuska. Duncan took part in that meeting, as did a representative of the Auditor and Inspector’s office.

District 3 Commissioner Darren McKinney took Country Corner representatives to task in that meeting for not having provided financial data that the commissioners wanted from the fire district. McKinney said it is hard for county commissioners to know how to answer questions from residents when they don’t have necessary data. Country Corner officials said they would immediately provide the requested information.

Mick Dodson, who represented the Auditor and Inspector’s office at the November meeting, said state officials had seen worse situations than the one they found at Country Corner.

The state audit report released Feb. 8 traces the history of the Country Corner Fire District. The district goes back to February 1997, when the Sperry West Fire Company was formed as a charitable, non-profit organization. In May of that year, the organization was renamed the Country Corner Fire Company. In April 2001, citizens voted to make the fire department a rural fire protection district. A primary result of this move was that the fire protection district had the ability to benefit from property taxation. Then, in January 2012, the district’s board of directors voted to license an ambulance service.

Additional findings of the state audit include: Country Corner lacked documentation for more than $13,000 of expenditures; it spent more than $9,200 on Christmas party costs and gifts that did not appear to have any public purpose or benefit; the district’s board held a vote over the telephone in December 2017, rather than in a public meeting, and approved the expenditure of $10,000; the district’s board talked in executive sessions (closed-door sessions) about matters it was not permitted by law to discuss; the board held an executive session without giving the required public notice; and the district is not in compliance with its reporting and payment of payroll taxes due to the Internal Revenue Service.

With regard to the Christmas party expenditures, the audit report shows this money was spent across a period of three years (2015-17) for gifts and food. The expenditures benefited firefighters, EMTs and their families and were not open to the public.

Details given in the report concerning improper executive sessions show that at least five such sessions took place between July 17, 2017 and January of 2018. The January 2018 discussion concerned, in part, providing reports to county commissioners.

The audit report further faults Country Corner for holding executive session discussions about employees without following the legal requirement to identify either the employee or the position to be discussed on the meeting agenda.

The audit report says that Country Corner improperly organized its ambulance service as an element of its fire-protection district, with the result that the ambulance service has been improperly insured. Further, Country Corner reportedly used a fire truck as collateral for a $50,000 line of credit and the funds were spent on the ambulance service.

Concerning the district incurring more than $303,000 of debt without voter approval, the audit report says Country Corner took out bank loans of $253,875, and $50,000 in November 2014 without a duly held election. As of Oct. 31, 2018, the district still owed $112,867 and $9,964 on the loans, the report says.

This audit report is available in its entirety at the website of the state Auditor and Inspector’s office.