Farmington Ready To Move Forward After Sentencing

FAYETTEVILLE — Farmington Mayor Ernie Penn last week said he is glad to be able to tell people Jimmy Story is finally going to prison.

Story, the city’s former financial officer and Farmington district court clerk, pleaded guilty in November 2017, to one count of theft concerning programs receiving federal money and one count of filing a false income tax return.

He stole more than $1.2 million from the city of Farmington and Farmington District Court over a span of about eight years, records have shown.

“That’s the one question people keep asking. When is he going to prison?” Penn said after Story was sentenced to 46 months in federal prison during a two-hour hearing July 11, in U.S. District Court in Fayetteville.

U.S District Judge Timothy Brooks also ordered Story to pay $1,283,966 in restitution to the city of Farmington and $371,956 in restitution to the Internal Revenue Service. Following prison, he will serve three years of supervised release.

“We’re glad to be done with it,” Penn said. “At least we know he’s going to prison and we did get a cash judgment against him from what he has now and what he gets in the future.”

Penn added, “We’ll put it to bed and go down the road and be done with it.”

Story began working for the city of Farmington in 1995, and resigned 21 years later on Dec. 5, 2016.

City staff discovered discrepancies in accounts after Story’s resignation.

Story’s replacement, court clerk Kim Bentley, was reviewing the court’s electronic case-management system to make sure she remembered how to use it from a previous court clerk position. She knew of a cash fine paid by a relative but then couldn’t find where the revenue showed up on the bank deposit.

City business manager Melissa McCarville then saw discrepancies between the amount of money that went through the cash register and what was actually deposited in the bank.

Penn said McCarville told him, “I think he’s been stealing money.”

After more reviews, the city took its findings to the Washington County Prosecuting Attorney’s Office. It was recommended to notify the FBI and request a Legislative audit.

Legislative Audit issued its investigative report during a Legislative Audit Committee meeting in October 2017.

The report accused Story of misappropriating more than $1.5 million over an eight-year period.

The report showed that Story was the sole employee responsible for preparing and making bank deposits, reviewing and reconciling bank statements and entering information into the court’s case-management system. He also was the only city employee authorized to enter and edit information in the court management system.

Story received revenues for the court and city but did not deposit the money into appropriate bank accounts.

Auditors found that Story made five types of unauthorized adjustments to the court’s system to reduce the monetary balance that was due from defendants and conceal the funds not deposited, and he used more than 14,000 illegal adjustments to fabricate reasons that fines, costs and fees collected were not entered into the system.

Legislative Audit forwarded its report to the FBI, IRS, Fourth Judicial District Prosecuting Attorney and the U.S. Attorney’s Office with the Western District of Arkansas.

The investigative audit also found multiple deficiencies by the city of Farmington, including improper oversight of fiscal operations and inadequate internal controls.

Legislative Audit made recommendations to the city and city officials assured the committee those changes would be put in place to avoid discrepancies in the future.

The city now has a deputy court clerk position and duties have been segregated through the city’s four-person office staff so that no one person has complete control over deposits, cash, reporting or reconciliations. Several people have to sign off on court collections each month.

Farmington was audited by Legislative Audit until 2007, when it began using a private certified public accounting firm, Przybysz & Associates of Fort Smith. The city has received “clean” opinions from the private firm, city officials said.

Following the Legislative Audit report, Farmington City Council voted to return to using Legislative Audit for 2017 and future years. Przybysz & Associates has not submitted its Farmington audit for the year 2016.

“At least we know he’s going to prison and we did get a cash judgment against him from what he has now and what he gets in the future.”

Ernie Penn Farmington Mayor

Penn