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District Attorney David McDade’s office paid 19 employees

By the Douglas County Sentinel on September 10th

Douglas County District Attorney David McDade’s office paid 19 employees more than $230,000 from seized drug funds but didn’t withhold any taxes.

As a result, the county is expected to pay $50,304 in Social Security, Medicare and other withholding taxes and could face penalties from the Internal Revenue Service and Georgia Department of Revenue.

The latest revelations came as part a probe requested by Douglas County Commission Chairman Tom Worthan in May after media reports first raised questions about use of asset forfeiture money and other allegations surrounding McDade’s office. The findings were first aired Monday night as part of an ongoing investigation by Fox 5 Atlanta’s Dale Russell.

A roughly 90-page final report of the findings of that probe was issued to the Board of Commissioners on Sept. 3.

The accounting and auditing firm Nichols, Cauley & Associates, LLC, conducted an audit of the usage of the funds. A letter from William Sammons of Nichols, Cauley & Associates to County Administrator Eric Linton dated Aug. 8, 2013 listed the group’s findings.

On the payments to employees for things like transcription services, the firm found the payments received by employees were not reported to the county’s Finance Department to be included on their W-2 forms.

Worthan said the county will pay the withholding taxes that were supposed to be paid and that the money paid to employees in the DA’s office from 2010 to 2012 will be included on their W-2 forms and counted as income like it was supposed to have been all along.

Worthan said that since the issues have been corrected, he hopes the IRS and GDOR will give the county some leniency.

“We don’t know if we’re going to be fined or not,” said Worthan. “Since we sent it to them, we reported the irregularities, hopefully they won’t fine us.”

The auditing firm also said the flow of the drug asset forfeiture funds to the district attorney wasn’t being done in accordance with state law.

The county recently amended how it handles the DA’s drug money so that Board of Commissioners controls the bank account that holds the DA’s drug money and must approve all expenses from the account. Prior to the BOC taking that action, McDade’s office held the money and controlled how it was spent.

“It was almost like the back office of the DA was being run like a small business,” District 2 Commissioner Kelly Robinson said. “They don’t have the infrastructure for that. We do. Had that all come through the county, we would have caught all of that and appropriately categorized or classified those people in the right bucket. We wouldn’t be here. But seeing that that checking account was totally invisible to the county, we had no idea.”

While the county hires an external auditor to check its finances once a year, Robinson said he believes having a senior level auditor who reports to the BOC would be a positive for the county in monitoring expenditures in every department year round.

On the allegation that some employees in the DA’s office were overpaid for transcription services, Nichols, Cauley & Associates didn’t compare what McDade’s office paid employees to the market rate for those services. But the county’s final report addresses the issue by saying “options for future transcript services include outside vendor or hire part-time employees.”

On the allegations of nepotism in McDade’s office, the report notes county policy isn’t clear. While one policy says any member of an employee’s immediate family shouldn’t be employed in the same department, another section gives exceptions where a department head may authorize family members to work in the same department.

To the question of whether a county vehicle was used for non-work related instances, the report found that “there is no definitive answer to this question.”

And to a report that a storage unit was acquired but not used by McDade’s office, the report found that while a storage facility was obtained for 12 months for the DA’s archived records, “additional shelving had to be installed in the storage facility to accommodate the files expected to be transmitted.” The report went on to state that while the shelving was being installed, “there was space made available at the old courthouse, rendering the need for the additional storage space unneeded.”

Robinson said the BOC hasn’t met since the report was issued, but that the findings might be discussed at a future meeting.

“For the most part, we’ve already taken all of the action that we’re going to take,” said Robinson.

Meanwhile, officials from the Georgia Bureau of Investigation said Tuesday that the investigation requested by McDade on May 22 into spending, procedures and hiring practices in his office remains active. No timeline for completion was made known.

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