State auditor issues demand letters for Cosmetology Board, former city clerk
State Auditor Stacey Pickering's office issued more than $21,000 in demand letters to several members of the state's Cosmetology Board Tuesday, plus $188,500 to the former city clerk of the town of Potts Camp.
In a news release, Pickering's office said that board members Darlene Smith, Bertha Johnson, Dorothy Ennis and Glenda Honeycutt, along with former board member, Waylon Garrett, were each issued separate demands for more than $4,200 apiece.
The release said the demand represented the money lost when the board failed to exercise proper oversight over the management of licensing fees, which were detailed in an auditor's report from January 9.
Pickering's office also issued two separate demand letters to Paula Mansell, the former city clerk of the town of Potts Camp. The first one was for more than $10,000 and covered alleged misappropriated court fees. The second one for more than $178,000 was for alleged misappropriated water and sewer fees plus a lawn mower that the town purchased, but never received.
In the report on the Cosmetology Board which covered fiscal year 2016, investigators from the auditor's office found more than $368,000 in checks and payments for cosmetology licenses — some more than nine months old — unsecured in the board's office. Investigators also were unable to find any logs or record-keeping recording receipt of the funds, which were found stuffed into drawers and filing cabinets. Several checks were returned for insufficient funds, the auditor's report said, because of a delay between receipt and being deposited.
According to the report, when investigators asked why cash receipts had not been deposited, employees indicated that a new system was in place and that none of them knew how to enter the receipts in the system.
Investigators found a large backlog of license renewals and also discovered that the board's procurement card was used operating expenses and held a large balance, costing taxpayers interest and late fees.
The report also said that the board didn't exercise appropriate oversight over its employees, including travel by the board's executive director, who was later fired and replaced in 2016. Investigators also found that the board's travel expenses, more than $118,000, represented an overly large percentage, 18 percent, of its budget. The board also didn't sign and post minutes of its meetings online in compliance with state law.
Those issued demand letters have 30 days to pay back the money or face prosecution. The demand letters also include principle, interest and investigative fees.