GRAND ISLAND — If criminal charges are to be filed regarding the misuse of Nebraska State Fair funds, those charges likely would be filed by a prosecutor in the state attorney general’s office, said Hall County Attorney Marty Klein.

In reviewing State Fair finances, the Nebraska Auditor of Public Accounts worked with the Nebraska State Patrol to gain access to personal bank account records.

The State Patrol may arrest someone if troopers believe they have probable cause, but the decision to file charges would be made by a prosecutor — either with the attorney general or in the Hall County attorney’s office.

Charges would be filed in the county where criminal activity took place, Klein said. That activity might be the county where checks were cashed, or where money was deposited into a bank.

State Fair Board Chairwoman Beth Smith said she found out about the financial irregularities in February.

“I had just been elected board chair a week before, and so I went to our attorney and said how can we look into this?” Smith said. The State Fair communicated with the state auditor and the attorney general’s office at the time.

Because the State Fair is quasi-governmental, “they didn’t immediately say we’re going to investigate,” she said.

So Smith sought out BKD accounting firm in Lincoln, which is the fair’s regular auditor. BKD has a forensic investigation team.

The fair board “immediately made the decision” to pay BKD to do the investigation, she said.

Several weeks later, the state auditor did agree to go ahead with their probe. “But we just felt like we wanted to jump on this,” Smith said.

At that time, COVID-19 arrived, slowing the investigation.

“They were telling me it was going to be four weeks, and it ended up being three months,” Smith said.

During the delay “we were patiently waiting and wanting to get all the information before we took our next step,” she said.

At the State Fair Board’s last meeting, it decided to take its bookkeeping services “out of house again” as they once were, Smith said.

On the State Fair website is a request for proposals for accounting services. The fair is looking for an accounting firm to be completely independent of the fair, segregating the duties.

The state auditor’s report is “actually more detailed in some ways than our BKD forensic report because the state auditor is able to subpoena records,” Smith said, referring to bank accounts and credit card records. “So there’s a lot of detailed information in the state auditor’s report.”

She said the fair appreciates the state auditor’s work, and she praised the fair’s new executive director.

“Bill Ogg is going to be a fantastic leader. He’s had a lot of experience, and I think we’re going to get our internal controls back in place,” Smith said. The fair will “have an accounting firm again, which we used to have. So I think we’re taking the steps necessary to ensure that this isn’t going to happen again.”

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