UPDATE: The Macon-Bibb County Industrial Authority says auditors found that $2 million in improper billing came from companies owned by people connected to former Chairman Cliffard Whitby.
Whitby resigned last August after being indicted on federal fraud and bribery charges connected to the Bibb County school district.
In a statement released Thursday afternoon, the district says it discovered apparent billing irregularities last year after Whitby's departure and requested an outside audit.
"The auditor's review found that these same contractors appeared to be owned by people related to the former chairman (Whitby)," the statement said.
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A Macon-Bibb County agency is asking three contractors to repay nearly $2 million dollars for work that they claim was never done.
That's according to documents released Thursday by Macon attorney Lester Miller.
Miller, who's running for mayor in 2020, says he obtained the 160 pages of records from the Macon-Bibb County Industrial Authority.
They include letters to an Atlanta company, Armstead Management; and W.M. Construction of Macon; and New Age Concept and Consulting of Macon.
Those letters and other documents allege that the companies billed the authority for a total of $1,954,749 for work that was never done -- in some cases, on buildings that didn't exist.
The billing happened between 2015 and 2017 and came to light last year due to audits, according to the authority.
The letter to W.M. was dated Dec. 14, 2017; the other two were were dated April 2 and demanded that the companies repay the money by April 12.
In his news release attached to the documents, Miller wrote that, "At a time when our local government is cash-strapped, I was frankly shocked" by the alleged false billings.
Stephen Adams, the authority's executive director, declined comment and referred questions to the authority's lawyer, Kevin Brown. He said the authority expected to release a statement on the matter later on Thursday.
We also could not reach Armstead, W.M. and New Age for comment.
Last year, the authority's chairman, Cliffard Whitby, was indicted on federal fraud charges.
He and a Florida lawyer are charged with paying a bribe to former Bibb County school Supt. Romain Dallemand.
Whitby is accused of bribing Dallemand to support Whitby's Macon Promise Neighborhood project.
That was a federally funded program where communities work to improve student achievement and graduation rates long-term by boosting the quality of life in city neighborhoods.
The project was run by Whitby's nonprofit, the Central Georgia Partnership for Individual Community Development. Federal tax records for the nonprofit show that both W.M. Construction and Armstead Management worked as contractors for Whitby's group in 2015,
Here is the complete statement by the Macon-Bibb County Industrial Authority:
MBCIA Awaits Response on Demands for Reimbursement
(Macon, GA – April 12, 2018) The Macon-Bibb County Industrial Authority (MBCIA) is awaiting response from letters sent to three (3) contractors demanding reimbursement of funds that were improperly paid to them for work not done or done unsatisfactorily. The Authority distributed these demand letters to the contractors in question on April 2, providing 10 working days for an adequate response.
The issue of potentially improper distribution of Authority funds to these contractors came to the attention of the MBCIA Board last August, following the resignation of former Board Chairman and Executive Director Cliffard Whitby shortly after his indictment of bribery charges related to his dealings with the Bibb County Board of Education.
Immediately following the former Chairman’s resignation and during a transition of MBCIA leadership and further review, the Authority discovered documents reflecting apparent invoicing irregularities with these contractors.
The Authority immediately contacted its outside auditors and requested a review of such documents and files, which included contracts and records of payments to these contractors. The auditor's review identified billing irregularities in connection with payments to several contractors who had been paid to perform construction, renovation and demolition work at various properties owned by the Authority.
These contractors had been identified through an RFP process conducted in conjunction with the Office of Small Business Affairs in 2015. The goal of the work to be done under the RFPs was to accomplish needed repairs, demolitions and rehabilitations to Authority properties hopefully utilizing local and minority vendors. The contractors in question were paid from the Authority's own funds for internal projects unrelated to any economic development projects with private industries or prospects.
The auditor's review revealed these same contractors appeared to be owned by persons related to the former Chairman. At the recommendation of the auditors, in order to evaluate the work performed in connection with these projects, and to determine if the payments to these contractors were fair and equitable, the Authority retained a respected construction firm to forensically inspect the work for which the Authority had received from and paid invoices to these contractors. The forensic investigation was completed in March 2018, and it also returned evidence of further irregularities in the invoices and payments.
The results of the forensic investigation were presented to the MBCIA Board and Staff on April 2, 2018, at which time the Authority issued letters to these contractors demanding a response and reimbursement, within 10 working days, for monies paid for the projects that were not completed and/or from invoices that were deemed invalid by the Authority and its investigative team. The Authority is awaiting a complete response from the contractors, with an expectation for eventual reimbursement, by April 18, 2018.
Based on the concerns identified in the auditor's review and the forensic contracting investigation, all of this information has been provided to federal and state law enforcement for further investigation. The Authority has and intends to continue to cooperate fully with federal and state authorities. The MBCIA has taken proactive steps to protect and prevent similar events from occurring again and is in sound financial position.
“This has been an ongoing process since the departure of the former Chairman, and we will continue to thoroughly evaluate information and evidence as it becomes available,” says Robert E. Fountain, Jr., Chairman of the MBCIA. “All the while, we will continue to carry out the mission of this Authority to grow the tax base and facilitate quality job growth in Macon-Bibb County.