Three Indianola aldermen have been served with demand letters from the state auditor’s office related to an improper $38,900 payout to a contractor last winter.
State Auditor Shad White announced on Wednesday that “Special Agents from his office have served City of Indianola Aldermen Ruben Woods, Marvin Elder, and Sam Brock Jr. with civil demands totaling $42,441.15 after they collectively misappropriated $38,900 in public funds to be paid to Spencer Construction in the absence of a binding, non-void and enforceable contract.”
That is $14,147.05 each the aldermen will have to pay back, the state auditor’s office confirmed.
The Enterprise-Tocsin reached out to each of the aldermen for comment but had not heard back by press time.
Spencer Construction owner Frederick Spencer approached the city late last year requesting it pay the $38,900 owed for a project that he completed in a Housing & Urban Development program run through the Mississippi Home Corporation and administered by South Delta Planning & Development District.
The problem is that Spencer contracted with the latter entities to rehabilitate a home in Indianola. He did not have a contract with the city itself.
That is why City Attorney Kimberly Merchant advised the board multiple times last winter that paying Spencer would not be legal.
HUD apparently froze the funds related to the project, citing that the project went on for far too long before its completion last summer.
The project started in 2018, SDPDD Director, Housing & Special Projects Randall Lauderdale told the board back in February.
There were multiple project delays, including during the height of the COVID-19 pandemic.
When the program got its footing again, Spencer Construction won the bid for the home rehab project.
Lauderdale told the board earlier this year that he had requested an extension from HUD and that he was optimistic the money would eventually be released. He noted that he felt like Spencer and South Delta had met all the criteria to be paid.
The E-T reached out to Lauderdale for a comment on this article but had not heard back by press time.
Lauderdale’s visit to the city happened over a month after board members voted to pay Spencer.
Ward 5 Alderman Brock made the original motion to pay the bill, counting on HUD releasing the funds at some point, which would have theoretically made the city whole.
Aldermen Woods and Elder voted in favor as well. Aldermen Gary Fratesi and Darrell Simpson voted no.
The city confirmed earlier this year that investigators from the auditor's office had visited city hall, requesting information about the Spencer payout.
“Aldermen Woods, Elder, and Brock Jr. all voted to pay Spencer Construction $38,900 despite the city of Indianola not having any written contract for the work provided,” the auditor said in his release this week “All three have been served with civil demands. No prosecutor has charged any of these individuals with a crime.”
White stressed the importance of elected officials following proper procedures when it comes to taxpayer dollars.
“It’s vitally important that government officials follow the proper process for spending taxpayer funds. This is what helps guarantee those funds are not misused,” said White.
