Twin Groves - State authorities are investigating the use of fire grant funds in Twin Groves.

Renee Preslar, public affairs representative for the Arkansas Department of Emergency Management, confirmed that the State Police is leading the probe.

ASP spokesman Bill Sadler said "there is an open case file involving the Twin Groves Community Fire Department," but couldn't comment further because the investigation is ongoing.

Preslar said ADEM was responsible for administering state Act 833 funds but that the state Fire Protection Board is responsible for determining whether an investigation should be conducted. After the board determined an investigation was warranted, Preslar said, state police were notified.

Sadler said once the investigation was completed, information would be turned over to 20th Judicial District Prosecuting Attorney Marcus Vaden.

Twin Groves City Clerk Amie Ealy said she contacted the Arkansas Division of Legislative Audit requesting an audit into the city's financial practices.

"I began contacting them in December, before I took office," Ealy said.

Tim Jones, field audit supervisor for Legislative Audit, said Ealy had contacted the agency requesting an audit of the city's finances.

"She called us, and she did request that an audit take place," Jones said. "We don't turn a deaf ear to stuff like this."

Ealy alleges that she is being asked by Mayor Theodore Brown to enter financial information into the city's computer system that she feels is questionable, such as depositing state street funds into the city's general fund.

The Arkansas Municipal League's questions and answers document on municipal law in Arkansas states that "All monies that are required by state law or municipal ordinance to be used on streets should be deposited into the street fund. Specifically they are:

1. Your town's or city's share of the three-mill road tax, levied pursuant to Amendment 61 to the Constitution of Arkansas, and codified as Ark. Code Ann. 26-79-104(b), should go into the street fund. The three-mill share 'shall be expended exclusively by the cities or towns for the purpose of making and repairing the streets and bridges within the corporate limits of the town or city,'" the document reads.

Arkansas attorney general opinions 97-234 and 96-215 state that "Monies received by your city or town which originated pursuant to the three-mill road tax, or pursuant to the Municipal Aid Fund, are therefore required by state law to be used on streets exclusively."

An agreed-upon procedures report was filed by state auditors for Twin Groves for 2004 and 2005.

Jones said an agreed-upon procedures report was typical for smaller cities and towns instead of a full audit.

"An audit is quite a bit more work than agreed-upon procedures. We do a lot of agreed-upon procedures in small towns," Jones said. "It allows us to basically get to the heart of the issue."

The report states that at least six instances of noncompliance were found during 2004 and 2005, the last available report for Twin Groves.

One issue of noncompliance stated that "State aid for highway funds was not deposited in the Street Fund in the amount of $16,832.17 as required by Ark. Code Ann. 14-59-104."

Asked if street funds could be used for general purposes as long as the funds were paid back to the street fund, Jones said, "It has always been our take on it that they're not supposed to use that money for other purposes. That money is set aside for streets."

Brown did not return messages seeking comment as of press time Tuesday.


(By Waylon Harris, Log Cabin Staff Writer.)

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