Editor's Note: This is an overview of the Forensic Audit report released by Newton County Monday. More stories on this matter will follow at CovNews.com and Sunday's print edition of The Covington News.
A forensic audit performed on various departments within Newton County government revealed that actions resulted in financial damages of more than $25 million, not including interest, litigation expenses, general damages and punitive damages, to Newton County taxpayers.
The audit, compiled by David Sawyer of Frazier and Deeter CPAs and Advisors, was released Monday evening, around two weeks after the Newton County Board of Commissioners (BOC) first saw the document. At that time, the BOC broke from their executive session to vote to send the audit to “the proper law enforcement agency.”
The report has been sent to the Federal Bureau of Investigation and Georgia Bureau of Investigation by Sawyer and to the Newton County District Attorney by Newton County Attorney Megan Martin.
A section concerning the recreation department, has been redacted due to the fact Georgia law that “allows an agency to withhold a document for up to 10 days after a completed investigation related to the suspension of, termination of, or complaint against a public officer or employee,” according to Martin. That portion of the document will be made available Dec. 8.
None of the other portions of the financial report will result in a personnel action, due to the fact no current employees are referenced other than citations from finance director Nicole Cross.
The parts of the report made public examined spending in the Nelson Heights Community Center, the proposed Bear Creek Reservoir, landfill and convenience centers and Special Purpose Local Option Sales Tax (SPLOST) and Impact Fees.
In the Nelson Heights Community Center section of the more than 120-page document, the Bear Creek Reservoir section and SPLOST/Impact Fees section, Sawyer recommended further investigation by law enforcement authorities.
Concerning Bear Creek, Sawyer’s report heavily mentioned former County Attorney William “Tommy” Craig and “misleading actions, financial loss, damage and harm of more than $25 million to Newton County taxpayers.”
Wednesday, Craig said he would release a statement to The News later this week.
Sawyer said Craig’s actions, including “misrepresentations and contradictions of material facts;” “financial damage to Newton County taxpayers;” “financial benefit to William Thomas Craig, Esq.;” and “significant, questionable and wasteful land purchases” “as a result largely contributed to the decline of the financial position of Newton County.”
Sawyer said another county official, District 4 Commissioner J.C. Henderson, also benefited financially from transactions made on behalf of the county.
“Commissioner J.C. Henderson as an officer of Nelson Heights Community Services, Inc. and Rising Son Christian Church, received preferential and financially beneficial treatment from the County,” Sawyer said in his report. “At least $42,148 of taxpayer funds were used for undefined, wasteful or abusive purposes …”
Among those taxpayer funds were $17,039 to then-county attorney Craig, unexplained operating expenses totaling $2,372, foregone rental revenue totaling $3,000, van purchase/transportation totaling $8,500, real estate transactions totaling $11,237.
Those real estate transactions concerned Henderson and Nelson Heights transferring property to Newton County along with an unsatisfied lien.
“These real estate transactions were financially beneficial to Commissioner Henderson and the organizations where he was an officer,” Sawyer’s report said. “The transactions were facilitated by then county attorney Tommy Craig. We recommend that further investigative steps be performed by law enforcement authorities to determine whether or not criminal activity has occurred.”
Craig’s name came up again in Sawyer’s report when discussing the landfill. Sawyer explained that Eco Tech, which is related to Eco South, two companies which had contracts at the landfill, have an “interlocking directorship with apparent relations to the then county attorney.”
Eco Tech billed the landfill for services in advance of any evidence of approval by the BOC, Sawyer said. Eco South was paid $112,223.89 from fiscal year 2006 through 2014 and Eco Tech had a proposed cost of $15,400 in an invoice dated Feb. 22, 2016.
Sawyer said each invoice rendered to Eco Tech before Nov. 17 was signed by Newton County Chair Keith Ellis.
Concerning SPLOST and Impact Fees, Sawyer’s report highlighted that SPLOST funds were used for payment in Impact Fees. At least $4,123,474 of SPLSOT 2005 funds were used for Impact Fee fund projects, Sawyer’s report uncovered.
Sawyer recommended that “systematic changes may be required to address this potential for commingling.”
“The Impact Fee fund borrowed at least $4,123,474 from SPLOST 2005 fund,” Sawyer’s report said. “Further inquiry should be undertaken by competent legal authority to determine the propriety of this inter-fund transaction activity.”
In summary, Sawyer reported financial harm and damage of $11,853 by the recreation commission $42,648 by Nelson Heights Community Center, $25,569,421 from the proposed Bear Creek Reservoir, $4,123,474 from SPLOST and Impact fees and a yet-to-be-determined amount from the landfill and convenience centers.
“It is my opinion that a series of actions were taken by individuals in various different positions within Newton County government, which caused financial harm and damage to the taxpayers of Newton County, Georgia,” Sawyer said in conclusion to his report.
Frazier and Deeter was hired by Newton County early this year, and began working on examining Newton County’s finances in March. Up through Oct. 31, the county has paid Frazier and Deeter $244,800.
Sawyer is a partner with Frazier and Deeter, one of the top 100 largest accounting firms in the nation, and was named the Top 25 best managed U.S. Accounting Firms and a Gold Medalist of Top American CPA Firms and an Accounting All-star by Bowman’s Accounting Report and Inside Public Accounting. Sawyer has served as a consulting or testifying expert in 300 investigations involving fraud, corruption and financial damages, and has been an expert witness in over 20 cases. Sawyer is also a licensed detective in the state of Georgia.