UPDATE: This article was updated with comments from Presiding Commissioner Jerry Nolte.
The Clay County Drug Task Force may lose part of its funding today due to what the County described as a breach in contract with its contracted audit firm.
Excelsior Springs Police Lt. Larry Tarrant said he describes the Drug Task Force as a valuable asset to law enforcement and communities within the county since the 1970s.
"If the funding is lost, our community and others in the county will have lost an important resource - one that is vital in battling illegal drugs and the crime and heartache that accompanies them," he said. "The quality of life within our county will undoubtedly suffer as a result of potentially losing the Clay County Drug Squad.”
According to a letter released by the Assistant County Administrators Nicole Brown, Brad Garrett and Laurene Portwood, grant funding may be lost due to the lack of a routine single outside audit performed by RSM US, LLP of Kansas City being submitted as part of the grant application. They said County officials have not received the required single outside audit at this time.
"In order to secure funding, the grant administrator for the federal funding that supplements a portion of the Clay County Drug Task Force has indicated that the County may not receive this funding for 2019 until the audit is released," they said. "Clay County is not in possession of this document despite numerous requests to the contractor."
According to a letter written by Lowell Pearson of Husch Blackwell, counselor for the County, sent to RSM on Oct. 10, the County re-entered into a contract with the audit firm on Feb. 8.
"As the RFP and Contract Terms and Conditions make clear, RSM was or should have been aware that: (1) the County needed an audited financial statement June 28th of the contactual year to remain in compliance with its bond covenant, and (2) RSM was contractually obligated to release to the Clay County Commission the final audit reports no later than June 30th of the contractual year," he said. "As of this date, RSM has failed to release the final audit reports to the Clay County Commission, and as a result, is in breach of contract."
Pearson's letter goes on to state, the damage caused to Clay County as a result of RSM's breach can no longer be described as theoretical in nature.
"The Clay County Sheriff's Department participates in the Missouri Western Interdiction and Narcotics Task Force, alongside the Kansas City Police Department," he said. "According to Captain Steven Siercks of the Sheriffs Department, a grant to continue funding for this program is dependent upon submission of a final audit report, referred to as a 'Single Audit.' The Health Resources & Services Administration may terminate the grant as a result of a 'Delinquent Single Audit.' Additionally, Siercks noted that further delay in submission of the Single Audit could jeopardize all federal funding that Clay County receives through the HRSA."
Presiding Commissioner Jerry Nolte said the County not being able to present the audit could not only jeopardize future grant funding opportunities but could also label Clay County as an unreliable party. This could put other partnerships the County entered into at risk as well.
"I am very concerned that the failure of Clay County to produce this legally required outside audit, not only will cause the loss of this drug task force grant and additional grants, but that Clay County will be seen as an unreliable partner in the region further tarnishing our reputation," he said.
The Assistant County Administrators said the grant in question only funds a portion of the Drug Task Force.
"The Clay County Sheriff's Office retains sufficient budget funding in its personnel lines to temporarily accommodate the lost grant revenue and prioritize Drug Task Force personnel," they said.
Budget information provided by the county shows $446,115.58 in unused personnel at year‐ending 2017 and $582,372.37 in unused personnel at year‐ending 2018.
However, Nolte said he describes the sheriff's budget as "already drastically underfunded."
"Anyone who advocates for the Sheriff to make up the funding shortfall for the drug task force caused by the county’s failure to produce the legally required outside audit is either trying to bankrupt the Sheriff’s Department or is totally ignorant of the realities of our budget," he said.
According to his letter, Pearson said he described RSM's breach as a serious problem for Clay County. The County demanded the final signed audit report be provided to Clay County by 5 p.m. on Friday, Oct. 18.
"If this deadline is not met, Clay County will take all steps necessary to protect its interests," he said.
As of press time, the Assistant County Administrators have not received the final signed audit report.
A representative from RSM said due to its firm policies and ethical considerations, they do not comment on client engagements.
Updates to this developing story will be provided as they become available.