The governments of Benton and Franklin counties lacked sufficient internal financial controls and one small Franklin County city misappropriated funds, according to recent reports from the state Auditor’s Office.

Auditors reviewed accounts related to federal and state funds each county received in response to the Covid-19 pandemic. They found turnovers in staff were contributing factors in why documentation and financial reporting failed to catch errors and properly track spending in both counties.

In Franklin County, that audit and another issued around the same time were tied to the county’s operations and management contract for the HAPO Center, as well as contracts for commissary and medical services at its jail. The audit findings have reignited a long-simmering feud between Franklin County’s commissioners and sheriff, resulting in commissioners seeking to strip jail operations from the sheriff. 

In Benton County, auditors found the county’s statements underreported, overreported or misclassified financial activity in multiple funds.

In other regional audit findings, state auditors found fraud in the small Franklin County city of Mesa, population 400.

Franklin County

Auditors looked at Covid-19-related funds in 2022 and contracts for management of the HAPO Center and contractor services at the jail in 2023.

The county used federally-provided recovery funds to maintain operations at the HAPO Center in the wake of the pandemic. Auditors found millions of dollars in overstated expenditure and revenue, misclassified spending and failures to identify the eventual recipients of those funds.

Regarding the reviewed contracts, auditors were unable to account for all of the HAPO Center’s revenues and expenses related to its management in 2023. The county also failed to collect $937,000 in fees owed by a food services contractor and paid more than $1.2 million above what was contracted for medical services at the jail.

Franklin County’s response included in the auditor’s report indicated that steps are being taken to improve financial oversight and correct errors.

Since the audits were made public, the county’s commissioners have voted to form a new county Department of Corrections under their direct oversight to manage the jail, which the sheriff’s office has long been responsible for. The commissioners and county Administrator Brian Dansel have said in statements that such an approach is necessary to resolve the challenges of “dual leadership” when it comes to jail operations.

“In Franklin County, the management of the jail has been under the spotlight prior to the state auditor’s report due to the number of lawsuits it has been involved in, and the costliness of those lawsuits,” according to a recent release from the county. “As Franklin County is part of an insurance risk pool with other multiple entities, it rests with the Board of County Commissioners to limit exposure to liability and to control costs.”

Benton County

In Benton County, the audit included accounts connected to highway planning and construction, as well Covid-19 funds. 

Auditors found the county’s statements underreported, overreported or misclassified financial activity in multiple funds with combined balances of hundreds of millions of dollars. Benton County also did not report $3.8 million in expenditures of the federal emergency rental assistance program related to Covid-19 assistance efforts.

“Additionally, (Benton County) submitted multiple revisions to the original financial statement package submitted for audit. Our review of the revisions provided identified multiple errors, including new errors, that were not detected during (Benton County’s) review,” auditors reported.

County officials said in their response included in the audit report that they are taking multiple steps to address the errors and prevent them in the future. Those steps include delegating tracking of capital assets to outside its accounting department, providing more training to new accounting staff along with improved processes and ensuring policies and practices are followed.

“These recommendations will help Benton County develop future processes to ensure more accurate financial statements submitted. Benton County agrees to implement the recommendations provided within this report to ensure the proper internal controls are in place. We want to thank the SAO for working with us throughout this audit,” Benton County said in its response.

City of Mesa

The city of Mesa’s former clerk-treasurer spent more than $12,000 of the city’s tax dollars on personal expenses, even after she was fired, according to a state auditor’s investigation. 

Auditors found evidence of the alleged fraud in the small Franklin County city while conducting a routine audit in 2024, according to the investigation’s findings. Charmain Halvorsen, who was clerk-treasurer during the time of the investigation, was arrested on charges related to the embezzled funds around that same time. 

Halvorsen was hired in late 2022 after the prior clerk-treasurer, Danni Speelman, was arrested for allegedly stealing from the city.  

Halvorsen was fired in October 2023 for not working consistent hours, resulting in the closure of Mesa’s city hall for several weeks, according to investigation documents. 

Auditors say the clerk-treasurer exploited a lack of financial oversight in the city government to use her city-issued debit card to spend $9,228 in personal purchases for groceries, decorations, vehicle loan payments, personal utility payments, storage unit fees, tires and online vendor purchases, with $323 spent after she was fired. 

Auditors say the clerk-treasurer also inappropriately spent $3,431 via an online clothing vendor between April and October 2023.  

An additional $9,913 in questionable debit card purchases was also found but auditors were unable to determine whether those expenses were appropriate due to a lack of documentation. 

City officials, in their response within the audit report, said they “are working toward a better system for reconciliation along with more involvement from the mayor and council to make sure the finances are not misappropriated. There will be some new daily reconciliation reports. We are working to improve the accounts payable process.” 

“Establishing proper financial controls can be challenging, but it’s not nearly as hard as explaining to your neighbors how their hard-earned tax dollars were lost. No matter how small your government is, there are ways to protect your finances,” said state Auditor Pat McCarthy in a release.

5/21/25 Editor's note: This article has been updated to remove incomplete and erroneous information about the contract issues related to the HAPO Center.