EPA: Lincoln County owes over $105,000
The Environmental Protection Agency says Lincoln County owes it $105,697.93 following an investigation into the improper use of grant funds from a cooperative agreement between the EPA and the City-County Board of Health.
That amount is the difference between $402,687.70 the EPA states the health board drew down in excess of expenditures, and a $296,989.77 reimbursement the EPA owes the health board.
The determination was laid out in a letter Sarah Hulstein of EPA Region 8 sent to Lincoln County Commissioner Mark Peck on Nov. 8, 2018.
Though it doesn’t explicitly say, the letter seems to signal the end of an investigation the EPA Office of Inspector General began about Aug. 31, 2016.
“This constitutes the EPA’s final agency determination,” Hulstein wrote.
The investigation evolved from a review begun after the EPA received a letter written by Commissioner Mike Cole and dated May 18, 2016.
Cole’s letter followed a report prepared by the Kalispell accounting firm Denning, Downey and Associates and completed in October 2015. The county had asked the firm to evaluate fees relating to the Asbestos Resource Program — funded by a cooperative agreement between the EPA and the City-County Board of Health — and paid to the health board’s then-legal counsel R. Allan Payne and his law firm, Doney Crowley P.C., from April 1, 2012 to Sept. 30, 2015.
The firm found that some attorney fees were improperly paid using grant funds without the required proof that the work was related to grant administration. The firm also questioned the fee agreement between the health board and Payne’s firm, as well as an agreement allowing the direct deposit of grant funds into a trust account at Payne’s firm and other irregularities in accounting and payment procedures.
Cole wrote to the EPA that the commissioners were “being advised this compensation [agreement] is not allowed under the grant provided to us by the EPA” and that “we need the EPA to advise us on this matter.”
Peck said that except for small differences in calculations, the county had come to expect it would owe money to the EPA.
“Obviously, we don’t like it, but it could have been worse,” he said. “The EPA could have nailed us for the whole amount but didn’t.”
Hulstein’s letter states that — despite the health board’s “improper fee agreement” and “inadequate financial oversight” — the EPA took a “cooperative audit resolution approach … to offer appropriate relief for past noncompliance if prompt corrective action has occurred.”
Hulstein credited the EPA and health board’s “strong commitment” to address the issues as the reason for taking the cooperative approach.
Peck said that County Administrator Darren Coldwell was working out the repayment details with EPA officials in Denver. Peck said the bill would “most likely” be paid out of the county’s Payment In Lieu of Taxes (PILT) fund, but that decision has not been made.
Peck said there was “no question” the county was looking into whether it can take any legal recourse against Payne’s firm, despite Hulstein’s letter not containing “a real strong statement” of wrongdoing.
“I don’t think there was ever any criminal intent, because [the agreement] was put into writing and agreed to,” Peck said.
He added that though one could argue the EPA should have been aware of the agreement in the first place, “it’s our responsibility as grantee to do things properly and it didn’t happen.”
The county hasn’t yet approached Payne or his firm, Peck said.
The $296,989.77 the EPA owes the health board follows the EPA’s withholding of funds from the cooperative agreement after the county brought the issue to its attention and pending the results of the investigation.