A settlement has been reached between the Hattiesburg Tourism Commission and State Auditor Shad White’s office in the matter of White’s demand regarding more than $422,000 in misappropriated funds on the part of commission members.
Marlo Dorsey, who has served as executive director of the Hattiesburg Tourism Commission since 2017, said Thursday the commission’s liability insurance company has settled with White’s office for $303,500. Of that, $6,475 was deducted for state investigative costs, with the remaining $297,025 returned to the commission.
Dorsey said it was her understanding from the Auditor’s office that those who received the “misappropriated funds” will not be required to return them and nothing will become of them.
White’s demand was issued after it was discovered commission members had received “unauthorized employee bonuses and retroactive payroll payments” from 2008 through 2013.
“The total amount of improper bonus payments in this case was $251,951.80 and our investigative costs were $6,474.66,” White said. “I’m pleased that taxpayers have received back all the money that was inappropriately spent on bonuses, along with our investigative costs and interest.
“We work hard, alongside attorneys in the Attorney General’s office, to make sure that these instances are brought to light and the taxpayers do not take a loss, so I’m grateful that we were able to reach the right result here.”
The tourism commission is now in the process of undergoing a long-term strategic plan, and the recovered funds will be set aside until the completion of the plan. At that point, the funds will be allocated toward the “highest and best” use for Hattiesburg’s tourism sector.
The latest Audit Exceptions Report, which was issued in August by White’s office, states an informal demand in the amount of $422,914.92 from misappropriated funds was made on Nov. 17, 2016, to current and former Hattiesburg Tourism Commission members Marshall Bell, Sandra Foster, Frank James, Dr. Cathie Price, James Ratliff, Chris Rowell and Bonnie Warren.
At the time of the demand, Rick Taylor served as the executive director of the Hattiesburg Tourism Commission and the Hattiesburg Convention Commission. Taylor, who now serves as executive director of the convention commission, said because he is no longer an employee of the tourism commission, he has no authority to comment on behalf of the commission or the individual commissioners.
In late August, the commission filed a lawsuit in Hinds County Chancery Court to recover the funds from its insurance company, as payment on the claim had not been made at the time. As a result of the settlement and the closeout of White’s demand, the lawsuit has been formally dismissed and the six commissioners are now in good standing with state officials.
“We are very thankful to have closure on these past issues, but it is also important to us that our community knows these commissioners are public service volunteers and did not receive a single penny of these payments to employees,” Dorsey said. “The law can hold individuals personally responsible for the repayment of payroll items not considered allowable forms of public employee compensation.”
The Audit Exceptions Report showed White had issued 43 formal demands to recover almost $3 million in misappropriated funds from several other organizations and individuals throughout the state, including the Mississippi Military Department, N.R. Burger Middle School, Oloh Volunteer Fire Department and a former Lamar County Deputy Tax Collector.