Deschutes sheriff talks CODE funds amid missing-money scandal

In the wake of a missing-money scandal, Deschutes County Sheriff Shane Nelson sat down with NewsChannel 21 Tuesday to discuss how his department manages money and announce he’s implemented new policies to ensure accountability.

Nelson told KTVZ that federal authorities, who are also investigating, have asked him to keep many of the details in the missing-money case private.

NewsChannel 21 broke the news last week that detective Capt.Scott Beard, the Central Oregon Drug Enforcement Team supervisor, was placed on paid administrative leave on Sept. 23 in connection with the missing funds.

Nelson said Beard is the only employee under investigation in the matter.

KTVZ asked Nelson to explain how the sheriff’s office authorizes expenditures and ensures public money is spent properly.

There are apparently several steps:

“We want a purchase order that identifies that expenditure,” Nelson said. “That will be signed off by an appropriate supervisor — (the item) will then be purchased. The receipt will be signed off and a voucher is created. That voucher will be signed off by two supervisors, as well as viewed by our accounts payable person and our business manager.”

Nelson said these procedures were in place well before an audit conducted by an independent company found money missing from several multi-agency accounts.

Nelson also mentioned these safeguards have been developed over several other administrations — namely following a scandal in which former Sheriff Greg Brown went to prison for embezzling hundreds of thousands of dollars from his department and a rural fire district.

Due to this latest scandal, and given the fact Nelson outlined several ways in which money is accounted, NewsChannel 21 asked whether the agency’s policies were adequate.

“We needed additional oversight, and I wanted to implement that immediately,” Nelson said, adding that he could not go into specifics at this time about the changes because that would involve disclosing details about the case involving Beard.

“We can’t speak about specific ways of conducting some of our operations because there is a risk to security,” Nelson said.

However, the sheriff added: “We have implemented some new procedures with some of our purchases and some of our requests for money.”

Nelson was appointed as sheriff in July, succeeding retiring Sheriff Larry Blanton, and has filed to run for a full term next May.

Nelson acknowledged the scandal is the not the first blow to the department recently. The Oregon Department of Justice is investigating the sheriff’s office and the death of an inmate that died of a meth overdose last December.

Video released in March to NewsChannel 21 shows staff mocking Edwin Mays III as he overdosed in a holding cell. Audio recordings also show jail staff acknowledging Mays likely needed to go to the hospital hours before he died.

Nelson said under his leadership, the sheriff’s office is always striving to become better.

“We don’t tolerate bad business, and if we make a mistake, we’re going to call ourselves on it, and we’re going to correct it,” Nelson said.

In addition to the sheriff’s office, the FBI and U.S. Attorney’s Office are also investigating the missing money.

Beard’s main responsibility as a CODE supervisor was handling and managing the group’s money. Sheriff’s Capt. Erik Utter has replaced Beard in these duties, at least for the time being.

According to the sheriff’s office, for fiscal year 2015-16, CODE’s total budget is $411,992. Last year’s budget was $531,945.

The money comes from a variety of sources, including funds the team seizes in drug cases, called civil asset forfeitures.

Crook County District Attorney Daina Vitolins is CODE’s legal adviser.

“Usually, we seize and forfeit between $50,000 and $100,000 a year,” Vitolins said. “It is placed in evidence — the cash is — and when it is forfeited, it goes into another account for distribution.”

Some of that money goes to various state and local agencies. About 63 percent comes back to the CODE Team for its operations.

“That money helps to fund any of the operational costs associated with CODE, which could be supplies or overhead costs,” said sheriff’s office Business Manager Beth Raguine.

Nelson said pending results of the investigation, he cannot say how much money is missing.

Beard has worked at the sheriff’s office for 13 years. Nelson said Beard has been the CODE administrator for two years.

In response to the investigation, Nelson said he has instructed his staff to go through prior budgets and assets, including updating an audit on armory inventory.

He also wanted to point out how critical the audit was to catching the missing money.

“There are checks and balances we had in place that worked, that eventually uncovered the issue of the unaccounted for funds and that led us to contact the federal authorities,” Nelson said.

Nelson told NewsChannel 21 he plans to release more information on the investigation into Beard as soon as he’s able to.

Authorities say they are unsure how long the investigation will take.