LUBBOCK, TX (KCBD) - We have new details about questionable record-keeping practices at a taxpayer funded non-profit.
In February, we reported that the North & East Lubbock Development Corporation had requested a criminal investigation of a former employee accused of misappropriating funds from the organization.
KCBD investigators have obtained past due financial audits from the organization which reveal new details about the missing funds.
The North & East Lubbock Development Corporation is a taxpayer funded non-profit dedicated to improving the economy of North and East Lubbock. But these audits from the past three years raise the question, who has been watching over taxpayer funds?
In April 2014, NELCDC's attorney sent an email that contained a warning for board members Quincy White and David Langston. He wrote, "failure to maintain a financial record, prepare an annual report, or make the record or report available to the public is a Class B misdemeanor."
The attorney recommended that the organization complete its annual audit.
Since that time, NELCDC has completed three annual audits for 2012, 2013 and 2014. KCBD obtained copies of those documents on Thursday.
Auditors had repeatedly warned the NELCDC board of directors of material weaknesses in its internal controls over financial reporting.
In its most recent financial statements, notes from the audits reveal that in three years, 2012 to 2014, an employee was able to make "unauthorized charges" using NELCDC's debit card amounting to about $12,000 a year, for a total of $37,155.
The notes indicate that the unauthorized charges were discovered in November of 2014 and that the organization expects to recover the funds through an insurance claim.
We don't yet know who misused these funds or how this money was spent, but we will continue to bring you details as we uncover them.
A sobering observation is found in note five of the 2014 audit, "78 percent of the organization's revenue was derived from a grant received from the City of Lubbock," reminding taxpayers where this money really came from.
KCBD investigators called the NELCDC office to ask its chairman of the board if and how the board reviewed monthly credit card bills before approving them for payment.
That call was not returned.