A special audit by the State Board of Accounts revealed some discrepancies in expenditures from the Dubois County Sheriff’s Office Jail Commissary Fund, ultimately leading to Sheriff Tom Kleinhelter repaying those expenditures.
In light of the ongoing investigation into Clark County Sheriff Jamey Noel’s misuse of jail commissary funds, the Indiana State Board of Accounts is taking a closer look at these funds managed by sheriffs throughout the state.
After performing the regular audit of the Dubois County Sheriff’s Commissary ledger, the state board of accounts stated it found some discrepancies and launched a special audit of the sheriff’s ledgers since taking office.
Last week, they released their findings to Sheriff Kleinhelter, members of the Dubois County Commissioners, Dubois County Council, and the Dubois County Auditor and published them on the State Board of Accounts website on Tuesday.
According to their findings, Sheriff Kleinhelter made several purchases outside the scope of the state code regulating the use of the funds.
Those purchases included travel expenses and conference registration for his wife to four conferences between 2021 and 2023. Those travel expenses totaled $8,852.95 for trips to Florida, Arizona and Dubai
Dubai was the most expensive trip at $7,375.92 on May 16, 2023, for the World Police Summit. According to the event website, it is an annual event hosting law enforcement agencies from 138 countries to gather insights from experts from the FBI, NYPD, LAPD, Metropolitan Police, Australian Police, Canadian Mountain Police, German Police, and many more.
According to the report, the sheriff also paid $887.40 for airfare to Panama City, Florida, for a law enforcement training event on May 2, 2023; registration for the National Sheriff’s Association Conference in Phoenix, Ariz. for $244.40 on Feb. 26, 2021; and airfare to Sandestin, Fla., for a law enforcement training conference for $347.50 on Oct. 4, 2023.
The State Board of Accounts also found that on November 1, 2023, the sheriff purchased four $100 Visa prepaid gift cards and 50 Blackstone 22-inch flat-top grills for $7,921.76. The items were given to the Sheriff’s Office employees as gifts.
The investigation determined these items were purchased outside of the code regulating the use of commissary funds.
Jail Commissary funds are collected through the sale of merchandise to jail inmates, such as snacks, laundry supplies, toiletries and other items. Under Indiana law, the sheriff has a limited number of areas on which they can spend commissary funds without approval from the county fiscal body, the county council.
According to Indiana Code 36-8-10-21, the commissary funds can be used at the sheriff’s discretion for several categories of items.
They can use it:
- to restock merchandise for the commissary and other expenses related to the operation of the commissary.
- specialized training for employees of the sheriff’s department;
- equipment for the jail;
- equipment for the department like vehicles, computers, software, communication devices, office machinery and furnishings, cameras, photographic equipment, animals, animal training, holding and feeding equipment and supplies or attire used by the employees;
- activities provided to maintain order and discipline among the inmates of the county jail;
- an activity or program of the sheriff’s department intended to reduce or prevent occurrences of criminal activities like substance abuse, child abuse, domestic violence, drinking and driving, and juvenile delinquency;
- operation and maintenance of the sex and violent offender registry website.
Any other expenditure that benefits the sheriff’s department must be approved by the Dubois County Council.
According to the State Board of Accounts, the travel expenses and gift purchases should have been approved by the Dubois County Council before the funds were used. They defined the expenditures as a misappropriation, and under Indiana law, those expenses are the personal obligation of the responsible official.
Kleinhelter reimbursed all the Jail Commissary funds identified in the audit as misappropriated with a personal check for $16,774.71 on June 27, 2024.
In an interview on Tuesday, Sheriff Kleinhelter stated that had his wife been an employee, the commissary funds could have covered her travel expenses at his discretion. “I contacted the State Board of Accounts by phone…I asked for permission to do that if, the commissary could pay for those trainings,” he said.
Kleinhelter said he was told it was okay, but his mistake was that “I did not make her a special deputy, which I have the legal power to do. That one piece of paper is the reason that didn’t go through.”
Regarding the gifts for the employees, Kleinhelter referred to a discussion with the council about the commissary funds, during which he was told to continue to use the funds as the department had in the past.
“I just didn’t go through the proper procedures,” he said, , emphasizing that this was just a mistake
The State Board of Accounts reported deficiencies in internal controls that contributed to the wrongful disbursem*nts of the commissary fund.
They found that Sheriff Kleinhelter regularly provided his ledger records to the council as prescribed by the law, but the council did not request additional information or documentation from the sheriff regarding those expenditures. According to the sheriff and the council, the expenditures were listed in the ledgers, though Council President Mike Kluesner said some details were lacking in the entries.
According to Kluesner, the council created a three-person committee to review future ledgers and oversee the commissary fund after the State Board of Accounts launched the special audit. Kluesner also said the council disagreed with the State Board of Accounts’ statement on the deficiency in internal controls.
A letter from Dubois County Attorney Greg Schnarr to the State Board of Accounts, included in the report, states that the council made several verbal requests to the sheriff to increase transparency and provide detailed insights into the ledgers in 2023.
Schnarr further wrote that the council’s establishment of the committee “underscores the county’s commitment to ensuring this fund is managed transparently and in accordance with Indiana law.”
According to the letter, the sheriff’s office has been compliant with the council and the committee’s requests since it established the committee.
The report indicated that the State Board of Accounts findings had been forwarded to the Dubois County Prosecuting Attorney’s and Attorney General’s offices, but no further action was noted. The prosecuting attorney’s office would not comment on the matter as it was under review.
Kluesner agreed with Kleinhelter’s statement that this was not a case of criminality. “It’s a misuse of public funds,” he said, adding that the audit didn’t reveal any egregious acts by the sheriff in using the money.
The council and sheriff have been discussing passing a resolution that would allow Kleinhelter and future sheriffs more leeway in spending money from the commissary fund for certain expenses. Sheriff Kleinhelter presented the resolution to expand what he could spend the money on during June’s council meeting.
Under the county resolution, the sheriff could pay for holiday events, bereavement dinners, retirement parties, and other items without coming to the council for approval. Kleinhelter told the council that the State Board of Accounts had suggested that the resolution be passed to help with frequent expenditures that may otherwise require council approval. The caveat being that the council set a spending limit on those purchases.
At Monday’s meeting, the council denied the resolution as presented in a 6 to 1 vote, with Councilman Alex Hohl the lone dissenting vote. Hohl said the sheriff was an elected official and should be trusted to know how to spend the money best here locally under the new resolution. “The county-wide election gave him the discretion to do that,” Hohl said.
At the end of June, the Jail Commissary Fund held about $323,000. Since then, the council has approved using it to purchase three new police vehicles.
