JEFFERSONVILLE — The criticism handed down from the State Board of Accounts on how Clark County Superior Court No. 3 Judge Steve Fleece had spent money out of the Alcohol and Drug Services Fund was outlined in a recent audit report.

But Fleece said part of his rationale for the expenditures was largely related to a lack of funds in other county offices, a sudden influx of money into the court and the desire to support county operations.



Political posturing?

Fleece said a lot of the money expended the last year he served as Clark Superior Court No. 3 Judge was a result of requests from other entities saying they were out of money. He explained the county courts and the Clark County Council had a three-year legal fight over the use of Probationary User Fee fund, where Fleece said the courts were strictly limiting the use of the funds.

Following a ruling by the Indiana Supreme Court in favor of the Clark County Courts, he said the state encouraged the courts to work with the county council in being good stewards of the funding they were receiving.

“There was a conscious effort to improve our relationship with the county council by being flexible in the use of funds where I thought I could be flexible, and I thought there was more room for flexibility with alcohol and drug fees than there was with Probation User Fees,” Fleece said. “Instead of fighting for the money to be used for rigidly defined purposes, I’m trying to think how can I be a good guy to the county council and taking some money and using it for broad purposes. And that was the mindset I was into at the end of my administration.”

He added that before the county captured the fees — which formerly included $18 to $50 fines on all moving violations — the courts were having a hard time covering their expenses.

“We went from near starvation in that program to all of the sudden that program was a major source of revenue,” he said.

But along with raising flags with the State Board of Accounts, Fleece’s use of the funds and the subsequent citations were not a surprise to other judges.

“Steve Fleece does not speak for all of us judges,” said Clark County Circuit Court No. 1 Judge Dan Moore. “After the 2010 [audit] report came out, none of those findings were shocks. I think the statute’s crystal clear.”

Moore also offered his own response to the payments made by Fleece, specifically during his last year on the bench.

“A judge’s job is to decide cases, not to handle nearly $1 million in cash for some purposes outside of the enabling statute,” he wrote in an official statement. “Thus it is not surprising that a legitimate inquiry is made by auditors and others to question former practices concerning fringe benefits, undocumented take-home cars or cell phones.”

Fleece described his reason for paying for cell phones for 24 county employees out of the alcohol and drug services fund was because workers had not received raises for several years. In addition, county employees had to pay more for their medical benefits, and while he had sufficient money to give raises, it was not available for all of the people that work in the courts.

“If I couldn’t give a raise, I gave a perk,” he said.

Moore cited that payments out of the fund for perks will not continue as the courts have adopted a new control system with the unified courts.

“We now have a new structure in place that should provide safeguards about that fund’s future uses,” he wrote.

Fleece again touched on why the previous payments out of the fund had been allowed to go on so long, and were not brought to light until two years after he had retired.

“In tone and substance, this audit appears to me to be politically inspired hatchet job,” he wrote. “I smell an old familiar skunk who would readily destroy a legitimate local governmental revenue source if he could not control it himself or profit by it.”

Fleece did not name who may be behind the “political attack.”

Moore offered a different opinion, and said the amount of spending in 2008 from the fund may have tipped off the State Board of Accounts.

“As to why auditors raised questions now, the answer might lie within the question itself relative to 2008 and subsequent years of expenditures,” he wrote. “Was there ever other times when nearly $1 million was spent out of that fund for external purposes or donations?

“One could surmise that the massive expenditures of 2008 and after were possibly attention-getters in the government auditing offices.”



Passing the buck

According to a response included in the State Board of Accounts audit report, Clark County Circuit Court No. 3 Judge Joseph Weber said issues about improper usage of the funds were first brought to his attention in late-2009. Superior Court No. 3 became Circuit Court No. 3 last year.

“My first meeting with State Board as judge of Clark Superior Court No. 3 was near the end of my first year in office,” he wrote. “At that time, I was made aware that the State Board had concerns regarding the nature of some expenditures. Upon the advice and opinion of the board, I significantly reduced the scope and nature of the operating definition of ‘drug and alcohol intervention.’”

But Weber said he had other contact with the state when improper payments out of the alcohol and drug services funds were never mentioned.

“When I came in, the CCADS — Clark County alcohol and drug services — and the funding mechanism for it had been in place for about two decades,” he said. “The first contact I had with the state of Indiana having anything to do with Clark County Alcohol and Drug Services was the recertification process.”

Weber said the state reviewed the county’s program and recertified it shortly after he took office in 2009. About a year later is the first time the State Board of Accounts offered concerns about some of the expenditures in the program, he said.

“Nobody met me at the door and said, ‘you can’t do this,’” Weber said. “I’m relying on the State Board of Accounts and what’s happened before. I think the best scenario would have been if the State Board of Accounts had given us this opinion maybe two decades ago.”

Once the improprieties were pointed out, Weber said the court’s practices changed and it implemented new policies. He said the court quit funding requests from local civic groups, which included things like Little League groups, church groups and Clark County’s 4-H programs.

Weber said expenditures out of the fund continue to support halfway house programs “which fit easily within a narrow definition of drug and alcohol intervention.”



Potential consequences

Changes in how the funds are used may create a larger impact on county government than anything else.

“Really, the county is the big loser in this,” Weber said.

He explained the funds helped provide IT services for all four courts, helped to cover costs for the prosecutor’s office and help support the operation of Clark County Circuit Court No. 2 Judge Jerry Jacobi’s drug court and Clark County Circuit Court No. 4 Judge Vicki Carmichael’s juvenile drug court.

And despite the changes, the alcohol and drug services fund will still be receiving revenue.

“Those fees are assessed to people that are charged and convicted or plead to related crimes,” Weber said. “Those fees will range anywhere from $75 for an assessment and $400 for education and treatment. Hopefully, there will be enough money in that to supplement Judge Jacobi’s drug court ... and hopefully there will be enough money in there to pay the folks in probation and [Clark County Alcohol and Drug Services] that provide these services. At this point my concern is that the program itself generates enough to continue to provide services to those people.”

Beyond funding county operations, the State Board of Accounts said the improper use of funds would be sent to Indiana Attorney General’s office for review. However, it is unlikely that any further action will be taken against Fleece.

“When the State Board of Accounts finds in its certified audit of a government unit that public funds are missing or misappropriated, then the Attorney General’s office can take civil action such as filing lawsuits to collect those funds on behalf of the State,” said Bryan Corbin, public information officer for the Indiana Attorney General, in an email.

He explained that the recently released audit is not a certified audit, and since money is not alleged to be missing, but instead misdirected, the Attorney General’s office has not been asked to collect any amount for the county or to collect from any individual.

“It does not appear that there is any additional legal action the Attorney General’s office is being directed to take in this audit, but we will review it to determine if our office has any further jurisdiction in this matter,” Corbin said.