A state audit of the Nebraska State Fair's finances found that a company created by its former finance chief received payments of nearly $150,000 over the past year.
The audit showed two checks totaling $149,415.60 were made out to RKBB Enterprises Inc. during calendar year 2019, according to a letter from Mary Avery, special audits and finance manager. The letter, dated Tuesday, was sent to State Fair Board Chairwoman Beth Smith.
RKBB Enterprises was created in May 2019 by Brandon Kopke, the fair's former chief of finance and administration. Kopke resigned at the fair's November board meeting after telling the board the fair was headed for bankruptcy.
According to the state audit, there were no invoices for the two payments, and auditors could not tie the payments to services rendered to the fair.
The audit also found that it appeared Kopke used bank accounts set up for RKBB Enterprises for personal expenses, including more than $41,000 for a truck, trailer and ATV, $29,000 for the purchase of land and nearly $55,000 for personal credit card bills.
"Virtually all of the funds in the RKBB bank account have come from the State Fair -- specifically, from the two State Fair checks discussed herein. Noteworthy also is the fact that all of the expenditures from that account appear to have been personal in nature," Avery's letter said.
The letter said the audit could find "no benefit received by the State Fair, in goods or services, for the $149,415.60 paid, through the two checks at issue, to RKBB."
The audit also found other irregularities related to payments and compensation to Kopke.
For example, he received a performance bonus of 20% of his salary for 2019. No other employee received a bonus of more than 10%.
The audit also noted that both Kopke and former fair Executive Director Lori Cox made questionable credit card purchases related to meals, travel, fuel and other items.
Nebraska State Fair to go on without many of the bells and whistles
The letter recommended that the State Fair "take immediate action to recover any funds that are found to have been disbursed improperly."
It said that because the audit's findings point to the possible violation of state laws, they are being forwarded to the Nebraska Attorney General, the Nebraska State Patrol and the Hall County Attorney.
The audit also recommended that the fair institute a number of changes, including better segregation of duties among staff, better adherence to its own administrative procedures and making sure all approved expenditures are supported by documentation.
In a response to the audit that was included in the letter, the State Fair board said it is "working with its newly hired executive director to quickly and thoroughly assess and implement recommendations from the State Auditor, as well as those from a recent forensic investigation."
The fair's finances became an issue last fall after a disastrous 2019 fair that was plagued by heavy rain left the organization more than $1.5 million in the hole.
The board eventually laid off nearly half its staff and took out a $1.1 million line of credit with a local bank, moves that have put its finances back on much more solid ground.
In March, Smith said an internal review of the fair's finances found suspicious activity, and the board at the time alerted the Nebraska State Patrol and the Attorney General's Office. Neither of those agencies has commented about any potential investigations.