Audit questions co-op's spending of emergency funds

Wednesday, July 13th 2005, 11:42 am

By: News On 6

OKLAHOMA CITY (AP) _ Federal auditors want the Federal Emergency Management Agency to revoke $8 million in grants that were given to two Oklahoma electric cooperatives to help them restore power following ice storms in 2000 and 2002.

Officials with Kiamichi Electric Cooperative of Wilburton and Central Rural Electric Cooperative of Stillwater said they may be forced to raise their rates if they are forced to repay the grants.

Auditors with the Office of the Inspector General have accused the cooperatives, which serve more than 30,000 customers of failing to follow federal guidelines in spending grant money from FEMA.

The auditors have asked FEMA regional director Gary Jones to revoke $6.2 million awarded to Kiamichi and $1.8 million awarded to Central Rural, but no decisions have been reached, agency spokesman David Passey said Tuesday.

Kiamichi used nearly $10 million in federal funds to restore power to its members following a Christmas Day ice storm in 2000, while Central Rural spent $5.4 million after a January 2002 storm.

Officials with the Oklahoma Department of Emergency Management, which received the initial grants, maintain the cleanup money was spent properly, although spokeswoman Michelann Ooten said the agency has not received the report on the Kiamichi audit.

In Central Rural's case, Ooten acknowledged some federal standards were not met in spending cleanup funds but she maintained the money was applied to reasonable uses.

Representatives of both cooperatives have discussed the audit findings with state and federal officials, but Kiamichi executives haven't seen the final report and Jim Jackson, the cooperative's manager of administration, declined to discuss the specific auditors' findings, but he said the federal funds already have been spent.

``We don't have that kind of money laying around,'' he said.

Kendra Stanek, communications specialist for Central Rural, said the cooperative is appealing the auditors' findings.

Stanek declined to address specific allegations, but said a letter state Emergency Management Department Director Albert Ashwood wrote to Jones in response to the audit applied to the cooperative as well.

Ashwood's letter indicates there are still misunderstandings with auditors despite attempts by state and cooperative officials to explain their procedures.

He urged Jones not to disallow the funding awarded to both cooperatives.