Rep. Ralph Howard wants financial discrepancies cleared before Farquhar State Cattle Ranch is sold

Published 12:00 am Thursday, July 19, 2007

GREENSBORO &8212; State Representative Ralph Howard is working to put the sale of the Farquhar State Cattle Ranch on hold until the accounting discrepancies that have surfaced about the site&8217;s profitability are resolved.

Howard, whose district includes Hale, Marengo, Perry and Bibb counties, said the accounting practices of the Alabama Department of Corrections have shown major flaws as more information surfaces on the financial situation of the ranch. He said the numbers presented by the state, without line item numbers to back them up, paint a different picture of the sites finances than the numbers he has received from the ranch.

He said, along with the incomplete numbers on the ranch, the fact that the farm wasn&8217;t mentioned in Department of Examiners of Public Accounts&8217; report on the department raises questions about if the farm was losing the money that department claims. He said department itself is supposed to do a financial audit on all of its facilities, which also would have spotlighted the financial situation of the ranch.

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Brian Corbett, the Pubic Information Manager for the Department of Corrections, said previously that the department didn&8217;t have complete financial records on the facility and that the numbers they used to compile their figures showing a financial loss were a mixture of the various records they could locate.

Howard said other recent numbers also released by the department have also made him concerned about its accounting practices. He said the $26.6 million budget shortfall claimed by the department as it initially looked into selling properties is of particular interest.

This is because the Department of Examiners of Public Accounts&8217; report on the department showed that for the past three fiscal years the department has had year ending cash balances that were positive, not negative. And starting the current fiscal year, in which this 26.6 million shortfall lands, the department had a positive cash balance of $29.25 million.

Howard said to get this information he is sending a public information request to the office of Department of Corrections, in which he will ask for the complete financial records from the ranch. He said he is sending a copy of the request to the governor&8217;s office as well as several media outlets.

Brian Corbett, the Pubic Information Manager for the Department of Corrections, said he has been instructed by Allen that access to all information regarding the financial situation of the ranch be restricted due to the threat of litigation. He said the move comes on the recommendation of the department&8217;s legal advisors.

Howard said such a move by the commissioner constitutes a violation of state laws guaranteeing the right to public information, which he says financial records of the ranch fall under.

Conflicting finances

Reports released from the Department of Corrections, which were used to gauge the cost of continuing farm operations as opposed to selling the ranch property by Allen and Gov. Bob Riley, showed the property lost approximately $198,000 during the past three fiscal years. Reports obtained from a source speaking on conditions of anonymity showed that the ranch made a profit during the same time period of between $527,919.90 and $341,919.90, based on total annual employee salaries for ranch operations ranging from $188,000 to $250,000.

Figures provided by the department list only revenues and expenses of the ranch and the resulting profit or loss for each of the previous three fiscal years and the first half of the current fiscal year, which runs from October 2006 to March of 2007.

The records obtained from the ranch list and combine the incomes provided through sale of catfish, livestock and other miscellaneous farm products along with federal grants to produce the total income for the operations. This is counterbalanced by a list of expense items, including repairs, leases, utilities, material, inmate labor, transportation and other equipment, which are combine for total expenses. These two figures are then used to deduce the profit or loss of the farm for each fiscal year from 2006 to 2003, and do not include employee salaries.

Discrepancies occur on both the revenue and expenses listed in each report. With the cattle ranch&8217;s number higher in revenue and lower in its expenses every year that coincides on the reports.

Sale information

Along with the cattle ranch, the properties listed by the governor&8217;s press office as being put up for sale are: 1,851 acres of the 2,215 acres at Red Eagle Honor Farm in Montgomery, an empty and unused 16,000-square foot building on South Union Street in Montgomery, 32 acres in Wetumpka on Highway 231 North and 10 acres at the old Kilby prison in Montgomery. Preliminary estimates by the Department of Corrections list the total income generated by the land sales to run between $16.33 and $23.87 million, with the value of the Farquhar ranch estimated between $9.29 and $12.38 million for the remaining 3,869 acres for sale.

Both Riley and Allen said the land sales, along with bringing inmates back from private facilities in Louisiana and putting more inmates in work programs, will allow the department to generate money to cover code upgrades, maintenance and capital improvements at state department of correction facilities that will cost is excess of $90 million. The improvements will be done over a period of several years, said Allen, and the funds generated through land sales will cover the cost of the first year.

Allen and Riley said all property that will be sold will be appraised, advertised and sold through a public bid process to the highest bidder. The governor&8217;s press office said the process will mirror that which was used to sell 540 acres of the cattle ranch in Greensboro earlier this year, which brought in $1.6 million and was higher than the appraised value of the property, $1.4 million.

Corbett said there is no way at this time to know how long the process of selling the property and moving inmates from the cattle farm will take, but the sell will be handled by the Alabama Department of Conservation&8217;s State Lands Division.