During a recent budget discussion, Commissioner Champion questioned Sheriff Nienhuis on how funds are dealt with that are generated by the Federal Prisoners Housing program.
The question and the answer reignited tensions between the county and the Sheriff’s Office.
The Sheriff created a special revenue fund for the $2.2 million in federal dollars that the prison has earned since FY 2014-2015. The county was not aware of the special revenue fund and the Sheriff’s Office did not make efforts to return the funds to the county, although they have gone unspent.
There was much disappointment expressed by Commissioners Holcomb and Allocco in the process of how the issue has been dealt with by the county as the Sheriff’s integrity has come into question.
Steve Champion emphasized that he has never expressed concern over the Sheriff’s integrity and looks at it as an accounting issue that needs to be fixed. “We’re talking about a process here on where the money should be. I applaud the Sheriff for doing a great job with the jail. It’s about are we following the procedure and the state statutes.”
He also stated, “No one is advocating to take anything away from them [Sheriff’s Office].”
Attorney Jon Jouben referred to several relevant state statutes and explained the interlocal agreement between the Sheriff and the county for the program housing federal prisoners in the Hernando County Jail.
“We have an interlocal agreement with the Sheriff that provides paragraph 5.3, ‘The Sheriff shall be authorized to enter into agreement for housing of inmates with other governmental entities for the purpose of generating additional annual revenue. Revenues from such contracts with third parties shall be allocated equally with the Sheriff and the county for the operation of the jail in the manner provided for in Florida’s Statute Chapter 129 (the annual county budget statute.) ”
He stated that issues arise with state statute 30.51 subpart 5: “All fees, commissions, or other funds collected by the sheriff for services rendered or performed by his or her office shall be remitted monthly to the county.”
He added that 30.51 subpart 6 requires all unspent funds to be returned to Board of County Commissioners.
Jouben explained that a special revenue fund is part of the chart of accounts which is committed to a certain expenditure other than debt service or capital projects.
Jouben said, “It is the opinion of the county attorney’s office that the funds have to be handled in that way. In other words the funds remitted to the county, have to be used for the jail in some form or fashion.”
Commissioner Nicholson clarified, “The Sheriff shall return the funds to the county which would go into our general fund and he (the sheriff) can ask for the funds back to be used for whatever purpose at the jail.”
That is correct, said Jouben.
It was stated that this process is in the original 2010 federal prisoner housing program agreement under Sheriff Nugent. Jouben stated that he took part in designing the framework of the agreement.
“Sheriff Nugent said that all unexpended funds would be returned to the county,” stated Jouben.
Whether or not that happened remains a question.
Sossamon stated that currently there is about $730,000 remaining from an original amount of $3 million that went toward improvements to the jail and its medical complex. That $3 million was taken out of the general fund.
Chairman Dukes clarified that is the jail renovations fund. He outlined what Federal Prisoner Housing program special revenue fund has earned in FY 2014 - FY 2017.
In budget year 2014- 2015, the sheriff budgeted around $100,000 in Federal inmate revenue. The jail generated around $338,000 in revenue from the Federal Prison inmate program and the Sheriff returned approximately $136,000 to the county at the end of that year.
In budget year 2015 -2016, he budgeted $200,000 and generated over $1.5 million from the federal prisoner program and returned nothing.
At this point so far, for FY 2016-2017 the revenue is $834,106 to give the current federal inmate program a balance of $2.2 million.
Jouben said that he does not believe that during the last two years, the interlocal agreement has been followed. “I do not believe it complied with the governing law and accounting rules. That’s not to say that... there is any allegation of criminal action. This is really just how do we handle these funds.”
He explained that since the Sheriff would like to use the funds for capital improvements at the jail, the funds would have to come into the county and then go back out (to the sheriff).
“It (federal inmate special revenue fund) is not included in the two last fiscal year budgets,” said Jouben.
Dukes stated that the auditor gave the Sheriff’s Office permission to do something that is done all the time (create a special revenue fund). How it got from there to “Well it’s in a special fund so we’re not going to return it to the county” became the problem, explained Dukes.
Commissioner Allocco felt that the auditor the Sheriff consulted failed to do their job. He stated that we hire an auditing firm to let us know if something is legal or illegal. He said that it just doesn’t make sense. “I expect him[CPA or auditor] to understand what the law is and for them to counsel me and put me in the right direction.”
Commissioner Holcomb vehemently stated that while he was deployed, the issue that kept him up at night was the prior and current Board of County Commissioners disrespecting the Sheriff.
“He’s been called a liar, a lawbreaker and he’s not doing the right thing for the county… I know he’s not a lawbreaker in this case and I know he does the right thing for the county.”
Holcomb asked Joel Fritton Legal Counsel with the Sheriff’s Office, what it cost them for the 2017 budget appeal and the current issue. He responded between 600 and 700 hours of staff time. Mr. Jouben stated that he’s spent an equivalent number of hours on these two issues.
“A thousand hours of government spent on appeals and shenanigans,” said Holcomb.
“I hope it ends, right now, today.”
Commissioner Holcomb emphasized that the revenue should go towards the operation of the jail, but recognized that the money should have been returned.
Commissioner Holcomb asked Fritton if the Sheriff spent any of the money.
Fritton replied that not a penny has been spent.
Holcomb stated that it’s sitting in a special revenue fund based on the auditor’s recommendation.
Fritton stated that is absolutely true and there are 30 years of precedence. He explained that the Sheriff as well as the Clerk’s office have special revenue accounts that do not get returned. He cited that there is no dispute about not returning e-911 special revenue funds.
He also stated that in 2012, the board passed an ordinance to send revenue back to the BOCC once a year, not monthly.
Fritton stated that in a survey they sent out to other Sheriff’s Offices in the state, 25 out of 28 that responded said they handle the situation in the same way.
Fritton said that the Sheriff’s Office would like to work with the county so they can move past this issue.
Commissioner Champion felt that all special revenue funds not being returned to the county should be examined and that the county should be following the law.
Commissioner Champion made the following motion,
“I move that this board direct the Hernando County Sheriff’s Office to deposit the balance of the fund that it has accrued from the housing of federal prisoners in the county jail into the county suppository no later than close of business Friday July 14th, 2017.”
How the money will be handled by the county will be decided at a later date. The motion passed unanimously.