State Audit Finds Numerous Problems With Chelsea City Government - NewsOn6.com - Tulsa, OK - News, Weather, Video and Sports - KOTV.com |

News

State Audit Finds Numerous Problems With Chelsea City Government

Posted: Updated:
File photo of the Chelsea Police Department. File photo of the Chelsea Police Department.
CHELSEA, Oklahoma -

An investigative audit by the Oklahoma State Auditor & Inspector's office found numerous problems with Chelsea's city government.

The Auditor's office said it conducted the audit at the request of District Attorney Matt Ballard. It looked into the dealings of the Chelsea Economic Development Authority, the Chelsea Improvement Trust and the town's government itself.

According to the audit, the town violated the terms of the sale of its electric distribution system in 1989, it hasn't maintained documents related to that sale, it purchased insurance from a company owned by the town treasurer and projects totaling $38,600 were not bid according to state law.

Read the report here

The audit found that voters approved the sale of the Chelsea's electrical system in 1989, on several conditions. The proceeds from the sale were to be held intact and the Chelsea Improvement Trust could only spend the money if voters approved the expenditure in a subsequent election. The audit says the proceeds would have had to be maintained at $2,200,000 to satisfy the terms, but the proceeds had been invested in non-qualified annuities and as of September 2016 the account had a value of only $1,557,463.99.

The Auditor's office says the town has improperly been making yearly withdrawals of $84,000 from the account. It also found that the town did not maintain documents, statements and policies pertaining to the account, even though the lack of compliance was brought to management's attention for four years.

The audit found that the town violated state law by paying $11,321.87 from July 1, 2014 to October 31, 2015 to buy insurance from Fraley Insurance, which is owned by town treasurer George Fraley. According to the audit, state law prohibits a town official from contracting with the town.

The town clerk told investigators the town obtained insurance quotes about every two years to get the best price and benefit for the town. However, the audit says investigators could find no written records of the quotes.

The audit says it found no conflict of interest between the town and the Bank of Commerce. Fraley, the town treasurer, owns 5% of the bank, but the law says a proprietary interest has to be at least 25%.

Special Features

Live Traffic

Get the latest road conditions on Green Country roadways.

iPhone App

Get breaking news, weather, sports & video directly on your iPhone.

CBS Shows

Watch your favorite CBS shows for free online.

Links

Looking for a website or event you heard mentioned on News On 6? Find it here!

TV Schedule

Need to know what's on TV? Check out our television schedule.

Live Radar

WARN Interactive

Special Coverage

  • Bridge Tracker

    How safe are Oklahoma's bridges? Use Bridge Tracker to find out now.

  • Fallen Heroes

    News On 6 honors our fallen Oklahoma heroes. View our interactive timeline.

  • Murrah Bombing Timeline

    Learn more about the events leading up to and following the bombing.

  • Storm Zone

    Watch tornadoes tear across Oklahoma and learn how to stay safe!

Powered by Frankly
News On 6
303 N. Boston Ave.
Tulsa, OK 74103
Newson6.com is proud to provide Oklahomans with timely and relevant news and information, sharing the stories, pictures and loves of Oklahomans across our great state.
All content © Copyright 2000 - 2018 KOTV. Oklahoma Traveler™ is a registered trademark of Griffin Communications. All Rights Reserved.
For more information on this site, please read our Privacy Policy, and Terms of Service, and Ad Choices.