Auditor: Former State Fair official may have broken the law

Former Finance Director set up his own corporation with NSF funds
A state audit of the Nebraska State Fair revealed that at least one former fair official may...
A state audit of the Nebraska State Fair revealed that at least one former fair official may have violated state laws.(KSNB)
Published: Jul. 21, 2020 at 1:44 PM CDT
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GRAND ISLAND, Neb. (KSNB) - The former finance director who said the State Fair was going bankrupt, may have himself stolen funds from the fair.

In a letter written to State Fair board chair Beth Smith, the Nebraska State Auditor Tuesday pointed to two checks totaling almost $150,000 which were paid to a private business owned by former NSF finance director Patrick Kopke.

The state Auditor of Public Accounts (APA) has been looking at the State Fair’s accounts for the last four months. They also accessed Kopke’s personal records and those of a corporation he set up named RKBB Enterprises.

In the letter to Smith, the APA said that RKBB received one check written in July 2019 for $97,783.64 and another written in September 2019 for $51,631.96. The APA said RKBB used the money to buy a pick-up truck, an ATV, and a trailer and for a processing fee related to the purchase of farm land in Howard County. The ATV and trailer were sold in 2020 after Kopke had resigned his State Fair position in late 2019.The APA also said the pick-up had been sold or traded.

The APA also noted $54,812.29 in payments to CITI from the RKBB account.

In the letter, the APA wrote in part, “In particular, the APA could identify 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, a business created by Mr Kopke during his tenure as Finance Officer of the State Fair.

Kopke resigned in November 2019, after warning that the State Fair would go bankrupt within a year.

The APA also questioned credit card transactions made by Kopke between November 2018 and November 2019 totaling $46,665.48.

It also referred to what it called questionable credit card transactions by former Executive Director Lori Cox, totaling $137,755.64 between August 2018 and December 2019.

“In analyzing these credit card charges, the APA noted several possible concerns, including expenditures for spouses, unsupported procurement of fuel, and meal purchase in Grand Island, Nebraska, and elsewhere,” the letter said in part.

The letter also pointed out that on July 12, 2019, the fair board passed a new policy requiring two signatures on every check greater than $5,000. The APA found five checks totaling $83,904.47, written after that policy was adopted, each of which had only one signature.

In a response to the APA letter, the State Fair said in part, “The NSFB has already eliminated the use of a signature stamp and is requiring two signatures for checks in the amount of $5,000 or more, drafted a procurement policy, employed a new Executive Director with extensive budgeting experience and is working on an RFP for an outside accounting firm.”

The APA said because of possible violations of state law they were sending the information to the Nebraska Attorney General, the Nebraska State Patrol and the Hall County Attorney’s office for further review. They are also sending the information to the Nebraska Department of Revenue and the Internal Revenue Service.

Fair Board Chair Beth Smith said it was Cox who uncovered the finance issues in February of 2020. Originally the state audit office did not want to take the case. After more pressure from the public, news stories, and the board the decided to take the case. It was delayed due to the pandemic. She also said the new Executive Director Bill Ogg has already put in place new policies to prevent any misuse of funds in the future.

In a prepared release Tuesday, Smith said, “The Nebraska State Fair Board is aware of the State Auditor Report which was released today. The Nebraska State Fair Board is a proud community member and takes seriously any alleged financial concerns within the organization. In recent months, the Board has initiated several steps to ensure accurate financial records and accountability, including initiating a financial audit, cooperating with the State Auditor and local authorities, and instituting financially sound policies and procedures. The Board will continue to take steps to ensure our resources are spent wisely and for the benefit of the Nebraska State Fair.”

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