KANSAS CITY, Mo. — A state audit of the Jackson County Community-Backed Anti-Crime Tax, or COMBAT, Fund revealed lax oversight both in terms of allocations and the monitoring of spending.
"The COMBAT Fund was created to help protect the safety of the citizens of Jackson County, and it's vital that these resources be managed effectively and appropriately," Missouri State Auditor Nicole Galloway said. "My audit has found several areas for improvement, and I urge county officials to take action on the recommendations in this report."
The COMBAT Fund has used the same percentages for revenue allocation since 1995, an indication that periodic reviews to ensure “money is used efficiently and anti-crime programs are adequately funded” have not been taking place.
In fact, it seems very little review of the effectiveness of COMBAT Fund programs exists.
“The county has not developed a plan for ensuring that performance evaluations of the programs funded by COMBAT are performed annually as required by county code,” according to the auditor’s report.
Perhaps most troubling were the questions about a real estate deal with the Independence School District and some questionable disbursements for payroll and a vehicle allowance.
Questionable spending
The Jackson County Prosecuting Attorney’s Office took control of the COMBAT Fund from the Jackson County Executive on Dec. 28, 2017, when the county legislature voted to override Frank White Jr.’s veto of an ordinance transferring supervision of the COMBAT tax and commission.
According to a review of salaries paid by the COMBAT Fund, approximately 150 employees — primarily working for the court, jail or prosecuting attorney’s office — are paid for completely with COMBAT money, an expenditure of nearly $5 million.
Portions of another roughly 100 county employees’ salaries, totaling $1.9 million in 2017 and $2.5 million in 2018, also are paid from COMBAT Funds.
“Some of those allocations were made for employees in other county departments,” Galloway’s office said in a statement. “The county could not provide documentation to support how these salary allocations were determined making it difficult to determine if all allocations were an appropriate use of COMBAT funds.”
The state audit also found vehicle allowances paid for with COMBAT money as well as $4,869 that was used toward a vehicle purchase for White’s former chief of staff and a $600 hotel invoice, which “lacked documentation of how the expenditures related to COMBAT programs.”
According to the report, “The county also does not have documentation to support how vehicle allowance amounts paid from the COMBAT Fund are reasonable and necessary.”
MyArts building
The auditor’s office also questioned the handling of a real-estate transaction in Independence, which the county bought from the city of Independence for $1 in December 2010 to house the MyArts drug-prevention program.
More than $1 million in COMBAT funding was used to renovate the building, which housed the program from 2013 until the end of 2016 when federal funding for the program ended.
“During May, June, and July 2017, personnel in the Prosecuting Attorney's and County Executive's offices attempted to negotiate a partnership between the county and the Independence School District to use the building for student educational needs,” according to the state auditor’s report.
When the district declined a partnership, the legislature instead sold the building to the Independence School District in August 2017 for $10 “without an independent appraisal or cost-benefit analysis.”
“My Administration opposed the sale of the MyArts building at the time and still believes the sale of the building was both imprudent and improper,” White said in a response to the audit.
The Jackson County Assessment Department estimates the fair market value of the property at $560,000.
“In addition, county officials could not provide documentation indicating the County Legislature considered and discussed other options for the building, or how the sales price was determined,” the report said.
This happened despite the fact that internal county estimates for renting the property to an outside business projected a $1.6 million return.
Additionally, “The County Executive indicated the building could have been used for other county needs since the county is paying rent on other buildings for employee workspace,” the report said.
Lax oversight
The funding and oversight process for “agencies providing treatment, prevention and anti-violence services” also proved particularly problematic, according to the report.
The state auditor found that 41% of agencies contracted for those services in 2016-18 failed to provide required supporting documentation and 36% exceeded the allowable monthly payment.
“The COMBAT unit does not always monitor and enforce contract terms for agencies awarded treatment, prevention, or anti-violence contracts paid from the COMBAT Fund, and has not determined if the county's goals for minority hiring and employment has been met for any new jobs created through contracts with agencies receiving funding,” the report found.
Furthermore, the auditor’s report found that 75% of agencies funded through COMBAT receive money annually, but there has been no system for tracking site visits of those agencies, such visits have not been performed annually and inadequate documentation exists for the site visits that have been performed.
“I’d like to commend the efforts of State Auditor Nicole Galloway and her staff, whose hard work will ensure COMBAT achieves its mission of creating a strong, safe community,” White said in a statement.
Recommendations
The state auditor’s office recommends that the COMBAT Commission undertake a thorough review of the allocation process and allocation percentages, ensuring that all permanent programs are guaranteed funding and that current allocations are appropriate.
Additionally, Galloway’s office recommends that the county establish a system for evaluating programs funded through the COMBAT tax in accordance with county code.
To shore up questions regarding funding allocations to outside agencies, the state auditor made the following recommendations:
- Require all agencies applying for funding to go through the selection process
- Require supporting documentation for all payments made from the COMBAT Fund
- Ensure agency compliance with contract requirements prior to disbursement
- Ensure payments only be made for invoices submitted in a timely fashion, for amounts allowable under contract terms and limited to the monthly payable amount
- Establish a system to monitor minority hiring and employment percentages proposed by agencies in funding applications
- End the practice of providing advances to some agencies
- Develop a system to ensure periodic site visits, which help determine if contracted goals are being met
The auditor’s report also recommends shoring up accounting controls for all disbursements from the COMBAT Fund, including payroll disbursements.
The report also recommended a review of the more than $55,000 in COMBAT money used in 2017 and 2018 to pay for vehicle allowances for county employees.
“While my Administration has not been responsible for the oversight of COMBAT for more than two years, we support the recommendations by the state auditors and to the extent feasible, will work with all parties involved to assist in implementing those recommendations,” White said in a statement.
Several changes already have been made by the county prosecutor’s office, since it was given oversight of the COMBAT program.
That includes the hiring of the COMBAT Budget Coordinator, three site monitors and additional oversight staff since December 2017.
The prosecutor’s office also reversed the county executive’s designation, which paid seven employees who didn’t perform work from the COMBAT Administrator from COMBAT funds, and has decreased vehicle allowances since assuming oversight.
Background
Voters approved a county-wide COMBAT sales tax, which currently generates more than $24 million per year, in 1989.
Money generated is used to fund programs within the Kansas City, Missouri, Police Department, the Jackson County Prosecuting Attorney’s Office, the Jackson County Drug Task Force and the Jackson County Circuit Court in addition to select nonprofits.
White appoints members of the public to the COMBAT Commission, which then makes funding recommendations to the Jackson County Legislature.
KCPD, the county drug task force and prosecutor's office each receive roughly $2.2 million per year from the COMBAT Fund, which also provides nearly $1.4 million for drug courts and $1.2 million for the DARE program.
More than $2.7 million of COMBAT money goes to the courts with another $3.5 million annually going to the county corrections department.
“My administration has fully participated in this process to help her staff complete their scope of work, which will include more than one audit report,” White said in a statement from his office.
The COMBAT audit, an independent review requested by the county from the state auditor’s office, is the first in a series of county audits expected in 2020.
Additional reports on procurement and budgeting among other Jackson County fiscal activities should be forthcoming this year.
