Originally published September 13, 2019 at 6 p.m., updated September 13, 2019 at 6 p.m.
JACKSON, Miss. (AP) — Mississippi's state auditor says accounting and contracting problems at the state's Blues Commission are so severe that the commission should be abolished and its responsibilities handed to the nonprofit Mississippi Blues Foundation.
State Auditor Shad White, in a Thursday report, says the commission has spent $1.9 million without filed contracts and can't document another $965,000 in spending from the $2.9 million total it has received. White says Delta State University, which has been handling the commission's money since it was established in 2006, should repay the $965,000 if it can't document how it was spent.
"I want to be clear that we saw no evidence of embezzlement, fraud or any other criminal violations when we performed this study," White said in a statement. "It's also clear the Blues Commission has done the work that the Legislature asked it to do, which is putting up markers to promote the blues around Mississippi. But it should also be clear that there are significant documentation issues that exist at the commission."
The commission's chairman agrees it is likely time for the commission's responsibilities to be handed off to the foundation, after the commission erected more than 200 markers on the Mississippi Blues Trail.
"The mission is essentially accomplished," said J. Kempf Poole, who told the Clarion Ledger the body is mostly in "maintenance mode." Poole said he and several other commissioners asked the auditor to look at the commission's books about three years ago.
At the time the audit was completed in August, the commission had about $64,000 remaining in the bank.
The auditor also said Delta State should repay $12,450 used to pay a former employee who was on the commission board, because board members were prohibited from being paid for their work by law. A nearly $1 million repayment could harm Delta State's finance. The university has been under close College Board supervision as it seeks to build reserves.
In a statement, DSU Provost Charles McAdams said he was "puzzled" by the finding. The university "provided all the documentation" auditors requested, he said, and never heard from them again.
"Delta State University remains able and eager to provide any documentation and can more than adequately respond to any concern," McAdams said.
The audit said Delta State was only ever appointed as the interim fiscal agent and failed to get required commission approval for the invoices it paid.
Auditors found Delta State and the commission improperly spent Mississippi Department of Transportation money on country music trail markers. The Mississippi Development Authority is in charge of that trail by law.
The audit said the commission improperly designated a number of vendors as sole-source providers, meaning it didn't have to put work out for bids. By far, the commission's largest vendor has been Hammons & Associates. The Greenwood ad agency has received about $1 million as the Blues Trail project's coordinator. It has been responsible for the design and production of the distinctive dark blue markers as well as the Blues Trail's website, smartphone app and maps. Hammons also produced a series of 16 films about the trail.
The audit also questions sole-source agreements with historians James W. O'Neal and Scott Baretta, as well as sign maker Sewah Studios and production firm Media Ranch. About $700,000 of documented spending went to those four vendors.
The auditor recommended the commission suspend work with Hammons & Associates and seek bids for all of its work.
Allan Hammons, president of Hammons & Associates, told The Greenwood Commonwealth that he wanted to underscore the state auditor's comment that the study found no evidence of criminal wrongdoing.
"That certainly provides a comfort factor for me," he said. "I'm confident that everything we did was over and above board."