DEKALB COUNTY, Ga. - DeKalb County purchasing officials failed to oversee a county program intended to help small businesses, most of them owned by minorities or women, a Channel 2 Action News Investigation has found.
An internal audit obtained by Channel 2 Action News also found that checks were backdated to show compliance with the Local Small Business Enterprise, LSBE, program.
The audit points a finger at Carroll County contractor S. Garrett & Co., whose lawyer flatly denies that checks were backdated.
DeKalb County created the LSBE program in 2006. Small companies certified by the county are given opportunities to win up to 20 percent of contracts given to larger companies.
Including the smaller companies in their bids gives larger companies a better chance of winning county business.
County purchasing officials are supposed to make sure that smaller companies are paid within seven days of the county paying the larger companies, which are known as prime contractors.
Austell businessman Hopie Strickland told Channel 2 that he had high hopes for the DeKalb program when he was certified in 2009.
"It was a godsend," he told Channel 2 Investigative Reporter Richard Belcher.
Strickland won parts of five contracts awarded to four larger companies. All the work was federally funded with money from the Energy Star Roof Replacement Program, part of the Obama administration's stimulus plan.
Strickland's company did demolition work on DeKalb County buildings including recorder's court and a recreation center in Scottdale.
But Strickland says it soon became apparent that he was not being paid as quickly as he should have been. Records show that he complained to DeKalb officials and later filed a series of liens in an effort to collect the money he said he was owed, but he was only partly successful.
In an October 26, 2011, letter, then-Procurement Director Kelvin Walton said the county had concluded that there was a $43,274 difference between what Strickland said he was owed and what the prime contractors had paid him. Walton promised no further help, writing to Strickland, "The department has exhausted our internal efforts." He added: "Our decision does not prevent you from further mediating the matter or pursuing any civil or legal remedies."
Strickland calls it the county's "dear John letter."
It took Strickland three more years to persuade DeKalb officials to undertake the audit that produced highly critical findings of the county's work and suspicions about one of the prime contractors that hired Strickland's company as a sub-contractor.
In her January 16, 2015, report, Deputy Finance Director Cornelia Louis wrote: "The county did not comply with requiring monthly ... reports from ... S. Garret, prior to releasing payment. The county also failed to monitor compliance with the LSBE program and enforce corrective action."
Louis concluded that DeKalb's facilities management unit "could not provide Internal Audit with project management documents such as project timeline, inspection reports, etc., to support various project completion dates."
In other words, Louis concluded that the county dropped the ball.
DeKalb Procurement Director Scott Callan, who came to DeKalb well after the LSBE fiasco documented in the audit, says he generally agrees with the findings.
Of one of the most serious findings that S. Garrett probably backdated checks to make it appear that it had paid Strickland on time, Callan told Channel 2: "It certainly is serious. At worst case, it would be fraudulent, and in that, certainly enough to warrant a question or three."
But it's not clear whether anyone will take another look at the findings in the audit. Strickland says he has complained to the U.S. Department of Energy's Office of Inspector General, because DOE oversaw the Energy Star Roof Replacement Program. Federal agencies do not comment on ongoing investigations.
Timothy Toler, the attorney for S. Garrett and Company, calls the DeKalb audit "flawed and inaccurate."
In a letter to Channel 2 Action News, Toler wrote: "Strickland materially breached its subcontract ... and left the project. Strickland is not entitled to payment for work Strickland failed to perform."
Toler also denies that his client backdated any checks. "Any delay in Strickland's receipt of checks was due solely to Strickland's delay in submitting documentation," he said.
Strickland, who is now in personal bankruptcy, told Channel 2's Richard Belcher that the audit "definitely backs us up 100 percent." Yet the audit concluded that Strickland is owed just $19,233, far less than Strickland insists that he’s owed, and it notes that he did not finish all the work he contracted to perform.
Callan doesn't offer any encouragement that the county will get involved in Strickland's fight.
"I would be hard pressed to say what specifically we could do that hasn't already been done," Callan told us. "Had the oversight been in place at the time, it could have been addressed in contemporary fashion. Unfortunately, that wasn't done."