CULLMAN — If Senate Majority Leader Zeb Little gets his way, financial records of all the county entities involved in an ongoing civil suit will soon face scrutiny from the state’s chief financial examiner.

Little, one of many county residents who has voiced opposition to the manner in which the county commission created and empowered two water boards earlier this year, wrote Chief Examiner of Public Accounts Ronald Jones Friday, asking that he authorize an audit of the financial records of the Cullman County Commission, the county water department, the Government Utility Services Corporation of Cullman County (GUSC) and the South Cumberland Cooperative District (SCCD).

The latter two entities are the subject of much controversy, having been created and entrusted with more than $30 million in county water assets at a late April county commission meeting that apparently took all by surprise, save for the half-dozen or so individuals involved in forming the entities and serving on their respective boards.

The fallout from that meeting has been immense—with no quick end in sight. The two commissioners who cast the majority vote in favor of the boards—Doug Williams and Wayne Willingham—were defeated in their June re-election bids and will be replaced in November. They, along with the GUSC and the SCCD, are embroiled in litigation that has taken its own series of dramatic turns.

After being named as defendants in the civil suit—a case in which commission chairman James Graves was one of seven original plaintiffs—the GUSC and SCCD functioned for one month before being idled by a circuit judge’s temporary injunction order. That, in turn, prompted all defendants to appeal the injunction to the Alabama Supreme Court. The appeal has not yet been heard.

Last month, Alabama Power all but shot down a pending permit request, filed by the county commission, that could have cleared a path for a proposal backed by Williams and Willingham to eventually draw county water from Smith Lake. The company’s vice president for environmental affairs cited the injunction order, as well as a general lack of regional consensus on the county’s long-term strategy to secure a water supply, as obstacles that justified its decision to suspend the application.

Meanwhile, Little and other Cullman-based legislators—all of whom are seeking re-election this fall—have been engaged by constituents asking for state intervention, not only to possibly dissolve the GUSC and SCCD, but even to restructure Cullman County’s three-person commission form of government as well.

As deposition testimony in the lawsuit continues, plaintiffs’ attorneys have targeted a number of water department charges they claim indicate, at the very least, a dubious or unclear use of the department’s revenues. Excepting the period between April 27—when the SCCD was formed, and May 28—when the injunction ordered the SCCD to relinquish to the county its burden of collecting and dispensing of revenue, the water department has been under county oversight.

In short, the chain of custody has been a roller coaster ride; perhaps not quite as thrilling. Keeping track of which entity had access to funds; when the funds were spent; whether the decision to spend funds on a particular enterprise was made under the SCCD’s control but was later paid out of county-managed accounts—or vice-versa...

...It’s complicated, even for those close to the case.



What Little wants



One particular set of charges, totaling $137,000, has been most questioned by the plaintiffs in the depositions. That amount was paid to Johnston Barton Proctor & Rose, LLP, a Birmingham law firm that first consulted with water department manager David Bussman earlier this year; then drafted more than 100 pages of documents that were filed on the day the GUSC and SCCD were formed in late April; then represented the GUSC in the lawsuit; and now represents all defendants—the GUSC, the SCCD and commissioners Williams and Willingham—pro bono in the supreme court appeal filing.

Citing the tedious and obscure documentation of that charge—especially in light of deposition testimony, which has seen lawyers for the firm invoke attorney-client privilege when defendants have been pressed to reveal the nature of the work the firm has performed—Little requested Jones, the Chief Examiner of Public Accounts, to expedite an audit of the whole thing—county commission, water department, SCCD and GUSC.

“There is discrepancy in the deposition testimony as to whom and under what authority the $137,000 legal fees were paid and if there was even legal authority to pay the legal fees in the first place,” Little wrote Jones Friday. “Moreover, if there was legal authority by one of the entities to pay the legal fees, there is a question of whether the proper procedures were followed before said payment was made.

“...Cullman County associate commissioners Wayne Willingham and Doug Williams revealed [in deposition testimony] that, over the past five months, legal fees in the sum of $137,000 (almost a $1,000 a page) have been paid to the Birmingham law firm of Johnston Barton Proctor & Rose, L.L.P. to review a water contract and to form the GUSC and SCCD,” Little stated. “Both Willingham and Williams claimed they did not know who paid the legal fees.

“Cullman County water department manager David Bussman testified that commissioner Williams directed him to retain Johnston Barton Procter & Rose instead of the local law firm that regularly provides their legal services, and that the fees were paid in part by the county water department and in part by the South Cumberland Cooperative District—the last being one of the two boards whose validity is questioned in the lawsuit. The chairman of the Cullman County Commission has stated that he did not authorize payment of these legal fees and, in fact, has no knowledge of any the aforementioned transactions.

“I am requesting that the Examiner of Public Accounts audit the Cullman County Commission, the Cullman County Water Department, the GUSC and the SCCD pertaining to who paid the legal fees and whether they were paid in accordance with state law. I also request that said audit should be broad enough to note any irregularities your examiners may find concerning any actions made by any of the above listed entities in forming the SCCD and the GUSC and the operations thereof.”



What the state Examiner of Public Accounts can do



The Department of Examiners of Public Accounts is empowered to audit the books, accounts, and records of all state and county offices, as well as those employed or elected to conduct business on those offices’ behalf. The department has the authority to audit the accounts of all entities receiving or disbursing public funds.

The department then reports on expenditures, contracts or other audit findings found to be in violation of the law. The Examiners of Public Accounts may conduct investigations as a result of audits, and can assist other governmental officers such as the attorney general, district attorneys and federal agencies. It can also require the repayment of money and other resources to the public agencies to which an audit finds them to be owed.

The Chief Examiner has the authority to issue subpoenas to compel the attendance of witnesses and the production of records in connection with audits. Each state and county officer must keep his books, records and accounts, and make reports as prescribed by the Chief Examiner.

In interpreting statutes relating to auditing by the Department of Examiners of Public Accounts, the state attorney general has ruled that the department's authority encompasses the funds and records of public corporations representing several county and municipal governing boards. State courts have also upheld the department's authority to examine the records of private entities contracting with governmental agencies.



‰Benjamin Bullard can be reached by e-mail at bbullard@cullmantimes.com, or by telephone at 734-2131, ext. 270.