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A grand jury has indicted the former emergency management director of Laurel County in Kentucky after he allegedly bought a handgun with public money for personal use. The Center for Investigative Reporting wrote about the local bureaucrat, Brian Reams, earlier this year after auditors revealed that he’d overseen $530,000 worth of contracts handed to a woman with whom he had a private business connection. She later became his wife, according to records.
That money stemmed from $1.9 million in federal preparedness grants awarded by the Department of Homeland Security as part of larger program local communities are eligible for when they’re located near U.S. Army chemical-weapons stockpiles. Auditors expressed doubt about how the entire amount was handled.
Local news outlets have reported that the recent charges against Reams involving the handgun are not related to the earlier findings. But auditors have said their conclusions were forwarded to the FBI and state authorities. Independent reports disclosed allegations that a company linked to Reams called PREP was hired by Laurel County to provide communities in the region with emergency-response trailers and generators. According to the Lexington Herald-Leader, Reams was terminated last year.
The trailers ultimately delivered “were inferior in quality and specifications,” auditors concluded. “Questions were raised by one [county official] as to whether these were even new trailers due to deteriorated conditions in some areas,” a report states. The company also appeared to overcharge for generators that counties were later forced to replace with more suitable ones.
There were other issues with Laurel County’s use of federal grants. Problems with the construction of an emergency operations center led to cost overruns of $220,000, and at least one vendor involved was overpaid by $20,000, according to auditors.
Then again this year watchdogs raised additional red flags about another $44,000 in expenditures. Among them were more than $5,600 in home furnishings for which Reams sought reimbursement, according to state records, including a sectional couch, dressers, night stands, three “captain beds,” La-Z-Boys and a cocktail table.
“[Kentucky’s Division of Emergency Management] has not required source documents, such as invoices or canceled checks,” auditors wrote. “This has provided an open door for subrecipients to falsify information and receive federal dollars for unallowable transactions.”
Elsewhere in Kentucky, other counties have been criticized by auditors in recent years for how they handled disaster recovery assistance provided by FEMA. One report shows that Carter County in the eastern part of Kentucky couldn’t provide adequate documents to explain what happened with $286,000 worth of such funds. “The majority of the project files contained only worksheets and did not include the required information recording that the work was completed, what work was completed, when and where the work was done, and why this work was done,” a report said. Local officials promised that in the future they would maintain better records.
In 2008, auditors scrutinized another $2 million in federal cash spent by Leslie County, also in eastern Kentucky, for recovering from disasters. They determined that in several cases there was little or no documentation to explain how the money was managed. Concerns about the spending were voiced repeatedly without the issues being resolved. Auditors finally said in 2008 they would encourage the state to determine if the funds should be paid back. Local officials continually vowed improvements but by that year had resorted to a brief answer contained in reports: “We will comply.”