Auditor demands repayment over mishandling of borrowed money

PASCAGOULA, Miss. (AP) — Mississippi’s state auditor is demanding that two former city administrators repay money he says was lost because of their mishandling.

Auditor Shad White sent letters Wednesday to former Pascagoula City Manager Joe Huffman and former City Comptroller Bobby Parker, he said in a statement Wednesday.

White said the two improperly mixed $27 million the Gulf Coast city borrowed in December 2014 and June 2017 into the city’s general fund.

Parker did not immediately respond to message sent to his LinkedIn account late Thursday. Huffman, now working for Horry County, South Carolina, did not immediately respond to a phone message and an email late Thursday.

White’s office says Huffman and Parker owe more than $31,500 in interest the city would have earned if bond proceeds had been deposited separately. He is demanding about $54,000, including lost interest and investigative costs. Parker is charged with more than $47,000, while Huffman is charged with less than $7,000. Parker and Huffman were both covered by surety bonds, a form of insurance against financial wrongdoing, making it likely the city will recover the money even if the men refuse to pay. The state could also file a civil lawsuit against them.

The auditor said the deposit into the general fund made it appear as if Pascagoula had more money than it actually did.

“The taxpayers of Pascagoula should know that $14 million is not missing from their bank account, but millions in bond money was spent on general operations in 2014 and 2017,” White said.

Current Mayor Dane Maxwell and other officials contacted the auditor after noticing the shortfall. The auditor’s office found the bonds have been repaid on time thus far, all money has been accounted for, and no money has been stolen. Maxwell blamed the prior administration for spending cuts and layoffs.

“We are glad to see this investigation conclude and that those responsible for mismanagement of our tax dollars will be held accountable,” he said in a statement Wednesday.

In August, the city borrowed $4.5 million to sustain the general fund while bond proceeds were removed and placed into a separate account.

Jackson County grand jurors declined in April to indict Huffman or Parker, finding no evidence money was spent on anything but city expenses.