The Flathead County Sheriff’s Office is investigating the possible embezzlement of tens of thousands of dollars within the Olney Rural Fire District after local residents raised concerns about dubious spending patterns.
Sheriff Chuck Curry confirmed that the alleged misuse of funds was under investigation but could not provide comment on additional details, as the investigation is ongoing.
Flathead County Commissioner Phil Mitchell said he filed a written request for a criminal investigation after numerous residents contacted him about the misuse of taxpayer money and the county took a closer look at the tiny fire district.
When county officials dug deeper into the record books, they discovered that tens of thousands of dollars had been spent at local auto parts businesses and grocery markets with little or no documentation.
In some cases, only the check stubs for the purchases were available, and officials had to contact the merchants directly in order to compile the expense report.
“I had about five different residents ask me to look into whether there has been a theft or misuse of funds by the fire chief,” Mitchell said. “For quite some time people have been insinuating that something was afoul and I believe they’re right.”
Olney Rural Fire Chief Ken Morehead resigned last week in light of the allegations, stepping down both from his position as the fire district’s chief and as a member of the Board of Trustees that oversees the district — a position that Mitchell called a conflict of interest.
Morehead did not immediately return phone calls from the Beacon.
According to the board’s annual expense report, the Olney Fire Department, which serves a community of roughly 200 people, spent $168,221 during the fiscal year that ended June 30, running almost $25,000 over budget and spending $103,000 more than the most recent annual budget, which the board of trustees passed July 27. The new budget totals $63,560 and includes $27,000 in loan payments.
The new budget dramatically reduces spending on line items like fuel, and eliminates budgeted spending for building maintenance.
The expense report shows that $44,679 was spent on building maintenance in fiscal year 2016, while just $4,600 had been budgeted for the line item. Other major discrepancies appear on line items such as vehicle maintenance, which incurred $36,074 in spending when just $9,000 was budgeted. Actual spending for non-capital purchases and groceries was $10,573, when only $5,000 was budgeted, and spending for fuel was $14,444 when $9,000 was budgeted.
“It seems to me like there has been a major misuse of funds,” Mitchell said. “We have cut their spending in half.”
At half of the previous year’s budget, residents in Olney can expect to see a dramatic reduction in their taxes. According to Sandy Carlson, the county’s chief financial officer, residents should see a 50 percent drop in their fire taxes under the new budget.
“For the portion of taxes that go to the fire district, they should be paying about half of what they were previously,” Carlson said.