Ex-Hobson House director under investigation
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Once again, someone was stealing from the bank accounts.
Waymark Code: WM5XYA
Location: Kentucky, United States
Date Posted: 02/27/2009
Views: 16
Ex-Hobson House director under investigation
Mandy Simpson
Issue date: 12/4/08 Section: News
The former executive director of the Hobson House is under investigation by the Bowling Green Police.
The Hobson House Commission terminated William Samuel Terry IV for alleged misuse of finances and neglect of duties in October.
A report from the city's internal auditor, Deborah Jenkins, stated that the commission unanimously voted to terminate Terry on Oct. 6 for "dishonesty, falsification of records, breach of duties and trust, exceeding assigned authority, financial neglect and dereliction of duties."
The Hobson House was completed in 1872 and opened as a historic house museum in 1972, said Melanie Smith, administrative assistant for the Hobson House.
The city turned Terry's investigation over to the Bowling Green Police Department after receiving the internal auditor's report, Mayor Elaine Walker said.
"Every member of the commission is devastated," Walker said. "I've known Sam since '93 or '94, and we just had no idea."
Barry Pruitt, public information officer for BGPD, couldn't comment on the ongoing investigation.
The auditor's Oct. 17 report stated that a review of Hobson House documents showed:
Terry requested multiple withdrawals from a Hilliard-Lyons account set aside for future projects. He appeared to have deposited the funds into a separate Hobson House bank account during 2004 and 2005. Commission members said the account had accumulated $25,000, but the current balance of the account is $425.
The Hobson House nonprofit organization, Friends of Riverview, lost its nonprofit status on Dec. 31, 2005 because Terry failed to mail required forms and payments.
Terry began duplicating his payroll checks in late 2007. He occasionally voided the second check in the Hobson House software and deposited both checks in his account.
No federal, state, or local payroll withholdings had been paid since Dec. 31, 2005.
The Hobson House gift shop began operating without a sales tax permit on Dec. 31, 2005, meaning the shop collected sales tax but didn't return funds to the state.
The "Riverview Hobson Grove" agency account at US bank was forced to close on Oct. 3, 2007 because of a continuing negative balance. The overdrawn balance of $3,138.73 was sent to a collections agency.
Terry mixed the Hobson House Commission funds with the Hobson House gift shop funds in a BB&T bank account. The Internal Revenue Service seized $7,457.28 from this account to repay taxes.
Terry and his attorney, Currie Milliken, couldn't be reached for comment.
The Hobson House commission resolved as many issues as possible immediately after the internal audit, Walker said.
The gift shop now has a sales tax permit, and the Friends of Riverview are active and working to update their documentation, Hobson House Commissioner Lanna Kilgore said.
However, Terry's actions will have repercussions.
The $24,575 absent from the Hilliard-Lyons account took years of fundraising efforts and city and county funding to accumulate, Walker said. The commission planned to use the funds to build a visitor's center and space to host social functions.
But the museum is stable enough to operate its regular schedule of tours and events, Kilgore said.
Walker said she commends the commission for it's quick action on the issues.
Members of the commission are appointed by the city, she said. They handle the house's budget, approve necessary repairs and hire and fire executive directors.
The commission receives regular financial reports from the executive director, but doesn't receive copies of bank statements.
Two commission members, Dr. Ron Hatcher and Kilgore, declined to comment on the investigation.
Commission members Jonathan Jeffrey, George Anna McKenzie and chairperson Margaret Stein couldn't be reached for comment. The Herald could not find contact information for commission members Joanne Powell, Col. Robert Spiller and Nicole Palley.
The commission hired Terry as executive director in 2004, but he also held the position for a time in the 1990s, Walker said.
The commission began investigating Terry's financial practices after a commissioner inquired about low balances in one of the Hobson House's bank accounts, Walker said.
The commission placed Terry on unpaid administrative leave on Sept. 27 because of "multiple suspected improprieties," the report stated.
That investigation led to the internal auditor's involvement.
Walker said the amount of trust placed in Terry by the commission and city could be the reason for the amount of time his discrepancies went unnoticed.
"The secret to all of this is to develop operating procedures that don't distrust, but don't rely on trust," she said.
Walker said the city is setting up meetings with other boards and commissions to ensure members are aware of all necessary documentation and appropriate accounting practices. The city is also exploring ways to prevent such financial abuse in the future.
"The bottom line is if someone really wants to steal, and they're smart, they'll find a way," she said. "The hope is that we make it difficult and lay the groundwork to create appropriate defenses."
Type of publication: Newspaper
When was the article reported?: 12/04/2008
Publication: WKU Herald
Article Url: [Web Link]
Is Registration Required?: no
How widespread was the article reported?: local
News Category: Crime
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