01/23/2024 - Jefferson City, MO
The former director of the Naylor-Neelyville Ambulance
District says he deserved the nearly quarter of a million dollars in
unsupported payments he authorized using district funds, but a new report
released today by Missouri State Auditor Scott Fitzpatrick finds that not only
were the payments undeserved, they also warrant criminal prosecution. The audit
of the ambulance district, which is located in Butler and Ripley Counties,
gives the district a rating of "poor" and also details how the former
director may have falsified board meeting minutes in an effort to mislead
auditors and cover his tracks.
"The people of Butler and Ripley Counties who gave
their hard-earned tax dollars to the Naylor-Neelyville Ambulance District
should be outraged by the lack of oversight that gave one person unfettered
access to hundreds of thousands of dollars, which he used for his own personal
gain and to line the pockets of his family members," said Auditor
Fitzpatrick. "This was an appalling abuse of authority that needs to be
prosecuted to the fullest extent possible, but it's also a cautionary tale to
remind all political subdivisions that they need appropriate oversight and
effective checks and balances in place to protect our tax dollars from misuse.
I urge the current Board for the ambulance district to implement our
recommendations as quickly as possible to ensure a breach of public trust of
this magnitude cannot happen again."
The audit covers the period of time from January 1,
2017, to June 15, 2023, when money totaling at least $249,247 was
misappropriated from the district. During that period of time, Brad Davis
served as the district director and for several of those years his wife served as
the billing clerk and his mother served as the board secretary. From 2017 to
2020, Davis improperly paid his wife $55,010 and authorized improper payments
to his mother totaling $20,950. From 2017 to 2023, Davis improperly paid
himself $173,287. In total, Davis issued 290 payments to himself, his wife, and
his mother.
All of the payments made by Davis were not allowed
under a contract the district entered in October 2016, when it opted to
outsource ambulance services. In an interview with the State Auditor's Office,
Davis was asked if he would be willing to repay any of the unsupported payments
to the district. He responded by saying "Unsupported doesn't mean
undeserved."
The improper payments authorized by Davis included
severance, duplicate, advance, and bonus payments, as well as payments for
unnecessary election services when no elections were held, and COVID-19
response payments when no response activities took place. Other improper
payments were for expense reimbursements that were unsupported and
questionable. As an example, Davis issued himself a $1,750 reimbursement check
on March 23, 2017, for "computer purchases/supplies/software." In
response to a subpoena, he turned over the district's computer, which could not
have been purchased in 2017 because it was manufactured in 2005 and contained
district files dating back to 2006.
The report details how the various improper payments
were deposited into the personal bank accounts of the director, billing clerk,
and board secretary. A review of these personal bank accounts indicated each
individual disbursed money from the accounts after the deposit of district
checks and may have personally benefited from the indecorous payments.
The audit also uncovered Board meeting minutes that may
have been falsified by Davis in an attempt to cover up the improper payments he
authorized. Meeting minutes from July 18, 2016, seem to indicate the board
approved a weekly salary of $650 for Davis, reimbursement for expenses, and
severance packages of no more than $10,000 for the director (Davis), billing
clerk (his wife), and board secretary (his mother). However, the meeting minutes
include the signature of a former Board President Faye Meyer, who didn't begin
her service in that position until 2018. Additionally, Meyer confirmed she did
not sign the 2016 meeting minutes and she, along with two other board members,
indicated they never approved the director, billing clerk, or board secretary
to receive compensation after outsourcing ambulance services.
When looking at how Davis was able to misappropriate
nearly $250,000, the audit found the Board did not provide adequate oversight
and failed to establish segregation of duties for the district's various
financial accounting functions. The Board failed to meet regularly to discuss
or review the district's finances and the director was able to issue and sign
checks from the district's bank account without Board oversight. The only
control in place for the disbursements was the second signature required from
the board secretary, who was the director's mother and indicated she often
signed blank checks in advance and could not verify some of the check
signatures were hers.
The report also outlines how the district did not
prepare budgets or file financial statements for at least the five-year period
from 2018 to 2022. Because of its failure to file financial statements, the
district currently owes $903,000 in fines. The Board also failed to obtain
annual audits of its district as required by state law.
The complete audit of the Naylor-Neelyville Ambulance
District can be found here.
