LINCOLN, Neb. (Nebraska Examiner) — The former head of History Nebraska might have violated state law in misdirecting $270,000 in funds forwarded to him to help cover losses in revenue caused by COVID-19, the Nebraska State Auditor’s Office said Monday.
Trevor Jones, who resigned as History Nebraska’s director effective July 1, should have deposited the funds, as required by law, with the Nebraska State Treasurer’s Office, said Craig Kubicek, deputy state auditor, in a letter Monday to History Nebraska.
Not used to cover losses
Instead, the funds — requested in 2020 to help the agency weather losses caused by the COVID-19 pandemic — were forwarded to a newly formed History Nebraska Foundation and were not utilized for pandemic relief.
The auditor’s letter said that the misdirection of funds could constitute embezzlement, theft or official misconduct and that the matter has been forwarded to law enforcement officials for their review. The case might also be a violation of the Nebraska Political Accountability and Disclosure Act.
Monies “due to the State of Nebraska” must be deposited appropriately, the letter stated.
‘Increased risk’ of waste, abuse
“Without such procedures, there is an increased risk for not only waste, misuse, or misappropriation of State funds but also violation of State law,” Kubicek wrote.
The auditor’s letter also raised concerns about the use of History Nebraska’s resources to help set up a private, nongovernmental entity, the History Nebraska Foundation, in 2019 and 2020. The work included having Jones set up the foundation’s bank account and then endorse and deposit checks into it. He also charged some expenses, for coffee and lunches, to a foundation debit card.
Jones did not respond immediately Monday afternoon to text and phone messages.
The president of the History Nebraska Board of Trustees, Omaha attorney David Levy, issued a statement Monday afternoon stating that the agency takes the issues raised “very seriously.”
“History Nebraska staff have already implemented some of the reforms the Auditor suggests, and they are working on others. The Board and staff will continue examining all financial practices and working to improve the operations of History Nebraska in all respects,” Levy wrote.
What reforms have been implemented were not spelled out.
Among the suggestions of the State Auditor’s Office were to clearly segregate state duties with those performed for a nonprofit foundation and to stop ignoring a recommendation made in past audits, which is to have two History Nebraska employees open the mail and log in funds received. Monday’s letter said a former mailroom clerk had told auditors that the staff had been directed not to log in some checks received and not to open mail from certain banks.
The Auditor’s Office also suggested that the agency recover funds that were improperly redirected and ensure that “no one individual” is responsible for financial transactions from beginning to end.
Examiner first reported
The Nebraska Examiner first reported in June that the State Auditor’s Office was looking into the handling of the funds.
In April 2020, with museums and historic sites impacted by the pandemic, the History Nebraska Board of Trustees had reached out to the Nebraska State Historical Society Foundation concerning an “economic solution to financial concerns” during “this crisis.”
The board chairman of the Nebraska State Historical Society Foundation, which was founded in 1942, responded that it had a discretionary account of about $250,000, from which History Nebraska could ask for funds for any purpose.
The discussed purpose here was “to help offset financial concerns caused, or at least exacerbated, by the COVID-19 pandemic.”
Two checks issued
That led the Historical Society Foundation to issue two checks to History Nebraska, in the amounts of $269,926 and $325.
Jones endorsed both checks, but instead of depositing them with the State Treasurer, he deposited both checks with the History Nebraska Foundation, which had been formed in December 2019 after Jones had clashed with the older foundation and in order to give History Nebraska more control of donated funds.
The auditor’s letter stated that the $270,251 was not used to cover COVID-19, but was instead used to bolster the bank account of the new foundation. It stated that the two checks amounted to 75% of the funds collected by the new foundation in its first 25 months of existence, and without those funds, the History Nebraska Foundation would have a negative funds balance of about $92,000.
$37,000 in expenses also questioned
The auditor’s letter also raised concerns about nearly $37,000 in expenses charged to the History Nebraska Foundation via Bill.com, which was described as “an accounts payable, cloud-based platform used to pay certain expenses of the History Nebraska Foundation.”
The 13 expenses were not described in the auditor’s letter, which said the expenses could have represented further payments or benefits for Jones. Kubicek said Monday that the Bill.com payments had been forwarded to law enforcement for further investigation.
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