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RALEIGH – An investigative report recently released by the Office of the State Auditor (OSA) was critical of several Hertford County officials for not following standard policy when it comes to approval of service provider contracts.

In this particular case, a service requested by the Hertford County Board of Elections that wound up costing nearly $20,000 was handled by a private company owned by an elected county commissioner. As a result, the OSA report noted that the county “cannot ensure that favoritism, corruption, and fraud was not present in the purchasing process.”

The investigation, which began last year, came after the OSA received two allegations through its Hotline concerning Hertford County. The investigation of the allegations included a review of the County Fiscal Procedures Manual, examination and analysis of available documentation related to the allegations, and interviews with the county officials and county personnel.

OSA investigators reviewed board minutes, emails, invoices received, payments made, and other documentation related to the purchase of services from a company – RA Enterprises, LLC, owned by Commissioner Ronald Gatling. The following time line is based on the review of those items:

July 9, 2020 – Hertford County Board of Elections stated they wanted the Director of Elections [Shelia Privott] to obtain a quote from ServPro, a national cleaning and restoration company, due to the COVID-19 pandemic.

July 10, 2020 – Creation date for RA Enterprises, LLC. The Articles of Incorporation are filed with the North Carolina Secretary of State. Gatling [who at that time was serving as chairman the board of commissioners] is listed as the President of RA Enterprises, LLC.

July 28, 2020 – RA Enterprises, LLC was set up as a new vendor in Hertford County’s financial system at the request of the Director of Elections. This occurred before any quotes from RA Enterprises, LLC or ServPro were received. During the OSA probe, the Elections Director told the investigators, “I needed to go ahead and make sure that we had a vendor in place because where we live in the northeastern part of the state, vendors were slim. So, I needed to go ahead and it was only two [vendors].” However, ServPro was never set up as a vendor.

July 30, 2020 – The Director of Elections received the first RA Enterprises, LLC quote for $1,311. This quote was limited to sanitizing and disinfecting only the County Board of Elections office.

August 24, 2020 – The Director of Elections received ServPro’s quote for $6,900 for sanitizing 13 polling places and the Board of Elections office. Investigator Note: Bids should have been solicited for the services since the cost exceeded $5,000. However, the Director of Elections ignored the quote received from ServPro and proceeded to conduct business solely with RA Enterprises, LLC.

August 28, 2020 – The Director of Elections received the second RA Enterprises, LLC quote for $1,241. This quote was limited to sanitizing and disinfecting the two one-stop early voting locations on October 14, 2020.

October 27, 2020 – The Director of Elections received the third and fourth RA Enterprises, LLC quotes. The third quote was for $7,011 and included 182 hours of sanitizing and disinfecting services for each of the two one-stop early voting locations. The fourth quote for $10,342 was for sanitizing and disinfecting 13 polling places before and after the General Election on November 3, 2020 (Election Day).

All totaled, RA Enterprises LLC was paid $19,995 by the county via invoices dated Aug. 11, 2020, Oct. 20, 2020, Nov. 9, 2020, and Nov. 11, 2020.

In its findings, the OSA said the county’s Fiscal Procedures Manual, which is also followed by the county’s Board of Elections, requires multiple quotes be obtained for services under $5,000 or that bids are solicited for services over $5,000. The manual also prohibits the county from purchasing items or services from its employees.

The OSA report specifically chastised the Elections Director for “approving purchase orders for services from the former Chairman’s company despite the county’s prohibition against purchasing from a company in which a county employee has a financial interest; failed to obtain quotes from other vendors for services under $5,000; and failed to solicit competitive bids for services over $5,000.”

The report also pointed out that “the county may have been able to obtain the cleaning services at a lower cost if the [Elections] Director had followed the County Fiscal Procedures Manual, which required price quotes from three vendors for services under $5,000 and competitive bidding for services over $5,000.”

OSA investigators said the [Elections] Director could not explain her reasoning for selecting RA Enterprises, LLC for cleaning services. She stated, “I don’t have an answer for that. I don’t.”

“The [Elections] Director acknowledged that she and the former chairman were personal friends,” the OSA report stated.

Additionally, the OSA report was critical of the county’s former Finance Director for failing to ensure compliance. That unnamed individual was, according to the OSA report, employed as the county’s Finance Director from Aug. 10, 2020 through Oct. 6, 2021.

“In Hertford County, the Finance Director is responsible for ensuring that all purchases are made in accordance with the Fiscal Procedures Manual. However, the former Finance Director failed to ensure that all four purchase orders submitted by the [Elections] Director were in compliance with the County Fiscal Procedures Manual before giving approval,” the OSA report revealed.

As a result of the investigation, the OSA recommends the following actions:

The Hertford County Board of Elections should consider disciplinary action for the Director of Elections for her violation of the County Fiscal Procedures Manual.

The Hertford County Board of Commissioners should develop a method to ensure that all companies in which Commissioners have an ownership interest are disclosed. The disclosures should be updated annually.

The Hertford County Board of Commissioners should be required to read, understand, and adhere to the Hertford County Fiscal Procedures Manual.

The Hertford County Finance Director should ensure that all procurements are in compliance with the County Fiscal Procedures Manual.

The Hertford County Board of Commissioners should ensure that its Fiscal Procedures Manual is revised to accurately reflect the procedures the County will follow related to procurement.

The Board of Commissioners responded. In a letter dated Jan. 18 to the OSA (a copy of which was attached to the OSA’s investigative report), the commissioners stated they have “immediately and proactively implemented internal fiscal control measures to address the findings detailed in the draft investigative report.”

The letter also noted that the County Fiscal Procedures Manual was updated effective Jan. 18 in reference to the OSA recommendations.

A copy of a resolution – adopted by the commissioners on Jan. 17 but not formally introduced at subsequent meetings of the board – was also attached to the OSA’s public report. That resolution states:

“Other than Commissioner Gatling, the other members of the Hertford County Board of Commissioners and the Hertford County Manager were not aware of the actions or activities referred to in the Report until being contacted by the OSA.

“In addition to the current Hertford County Director of Elections, the Report is critical of the former Hertford County Finance Officer and former Chairman Gatling of the Board of Commissioners related to violations of County policy.

“Despite their lack of awareness of the prior actions referenced in the Report, the Hertford County Board of Commissioners and the County Manager have accepted a responsibility to strengthen policies and procedures to prevent such a situation from occurring in the future, and steps to do so have already been put in place as outlined in the County’s response to this Report.

“The Hertford County Board of Commissioners hereby expresses its displeasure in the circumstances outlined in the Report and does not condone the actions of Commissioner Gatling in this matter.”