Forensic audit alleges former Hanceville water board employee misappropriated $88,000 in funds

By Patrick McCreless

HANCEVILLE — A recent forensic audit of the Hanceville Water and Sewer Board alleges a former water department employee misused more than $80,000 in funds over a four year period.

The audit findings allege that Sally Alexander — who is currently a member of the Hanceville City Council and was former co-manager for the Hanceville Water and Sewer Board — either misappropriated, inadequately documented or made without proper authorization, water board funds totaling $86,015.83, between Jan. 1, 2005 and March 31, 2009.

The audit also alleges that former water board manager Brian Waldrep, misappropriated, inadequately documented or made without proper authorization, funds totaling $2,549.

The audit findings were revealed Thursday during a special-called meeting of the water board.

“The board will contact the appropriate federal and state law enforcement authorities and advise them of the results of the forensic examination and will cooperate in any investigation by them,” said Board Chairman Junior Brooks.

He also said the board would consult with legal council to determine possible ways to recover the funds and inform the Environmental Protection Agency and the Alabama Department of Environmental Management of the audit findings.

“And because several board members also serve in other public capacities for the city of Hanceville, they are required to notify the state Ethics Commission of these findings and will do so,” Brooks said.

When informed about the meeting and the audit, Alexander said she did not want to comment.

“I’d like to know what they’re (board) talking about,” Alexander said.

Waldrep could not be reached for comment.

Hanceville Mayor Kenneth Nail, who attended the meeting, was surprised by the audit findings.

“The information is very troubling,” Nail said. “But everyone is innocent until proven guilty.”

Nail said he did not know if the audit findings would be brought up at the next city council meeting.

When asked about her position on the city council, Alexander said she had no plans to resign.

The board commissioned the forensic audit from a Birmingham accounting firm in March, after Alexander had allegedly presented their regular accountant with inconsistent and multiple sets of financial records.

The board fired Alexander in July — ending her 16-year career with the water department — after preliminary findings from the forensic audit were revealed.

The findings of the audit are as follows:

* Fifteen instances in which Alexander wrote herself checks in the amount of $4,638.15 for sick leave in violation of the Hanceville Water and Sewer Board employee handbook.

* Thirty-four instances totaling $17,249.99 in which Alexander paid herself for vacation time using a method in violation of the water board employee handbook.

* Ten instances totaling $7,881.05 in which Alexander paid herself for compensatory time. Compensatory time is commonly known as time off in lieu of pay. During her interview with the forensic auditors, Alexander indicated she understood that compensatory time was time off in lieu of pay.

* Sixty-six instances totaling $2,794.15 in which Alexander paid herself for overtime using a method in violation of the water board employee handbook. The handbook states, “holiday, vacation, sick leave, personal leave, military time taken, compensatory time taken, schooling/training time, will not count as time worked for the purpose of computing overtime.”

* Nineteen instances in which time listed on Alexander’s time card as regular, holiday, sick time, vacation or compensatory time, was not in agreement with her weekly time card, which resulted in an overpayment of $2,192.94. This overpayment is the difference between actual gross wages paid and re-computed time card gross wages. This also resulted in a misstatement of accrued sick, accrued vacation and or compensatory time.

* Alexander signed current Water Board Manager Chris Freeman’s signature to 10 purchase orders, totaling $6,696.27, without his authorization or consent.

* Alexander made 89 fuel purchases totaling $3,116.34 of water board funds in which said purchases did not provide evidence of a business purpose, corroborating support or supervisory approval. This included 52 purchases of fuel at Murphy’s in Cullman.

* Alexander had 41 restaurant charges totaling $2,240.65 that did not provide evidence of a business purpose or proper approval.

* Alexander charged 36 hotel stays totaling $9,953.46 that did not provide evidence of a business purpose and or authoritative approval.

* Alexander made 22 unauthorized charges to Verizon Wireless totaling $2,852.83. Verizon charges were typically paid by check, but these charges were made with the water board credit card and did not have a reasonable description of services or the items purchased.

* Alexander made six credit card purchases for clothing totaling $514.18 allegedly for field uniforms, although employees of the water board did not wear uniforms during this time period.

* Alexander made 46 credit card purchases totaling $9,797.18 that did not have supporting documentation or credit card receipts to support the charges.

* Twenty-three instances totaling $7,434.61 where Alexander reimbursed herself for mileage subsequent to her purchase of gasoline with the water board Visa credit card.

* Alexander used the water board credit card to pay her son’s Verizon bill in the amount of $80.

* There was the unauthorized sale by Waldrep of farm equipment originally purchased by the water board. Waldrep personally sold the equipment for a personal gain of $250.

* In 2005, the board purchased a new flat bottom boat for $2,299 that was subsequently traded by Waldrep for an inferior used boat without board approval.

* Patrick McCreless can be reached by e-mail at patrickm@cullmantimes.com or by telephone at 734-2131 ext. 270.