‘Highly inappropriate’: Nebraska state auditor alleges Oak Creek Township board members misused federal funds

By Jessica Perez

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    OAK CREEK, Nebraska (KETV) — Oak Creek Township is under the microscope as the state auditor releases a report alleging board members improperly used federal dollars.

The report states board members gave themselves bonuses with Federal Emergency Management Agency funds meant for disaster relief.

The 2019 floods cause damage and chaos throughout Nebraska, including damaging roads within the Oak Creek Township in Butler County.

The township asked for FEMA funds to reimburse township expenses, such as payments made to board members for their efforts during the disaster.

Nebraska State Auditor Mike Foley said, instead, board members Eileen Rock, Jerome Kudlacek and Rich Novacek used the money to give themselves bonuses.

“We discovered these board members were being double reimbursed for expenses that they incurred,” Foley said. “First, they incur the expenses and the township reimbursed them. That’s proper. Then, the FEMA money showed up and that FEMA money should’ve gone to the township.”

According to Foley, $5,043.37 was distributed amongst board members after already receiving $8,825 in previous expenses.

“Highly inappropriate, absolutely inappropriate,” Foley said.

Foley said he discovered this in the process of reviewing the township’s audit waiver request.

“There was no attempt to cover it up, I don’t know if they gave a lot of thought into the what the appearances of this would be or the legalities of it all,” Foley said.

He cited minutes from the township’s annual meeting in September showing bonuses were approved for “considerable time and energies,” grant applications, documentation, communication and gathering funds for road repairs.

Foley believes this is a conflict of interest.

“You can’t use your position to enrich yourself and these board members were in a position where they could vote themselves money and they did,” Foley said.

Treasurer Jerome Kudlacek said it’s a misunderstanding and they don’t know what they did wrong.

“We are working with the Nebraska Accountability and Disclosure Commission and have made progress on understanding the situation,” Kudlacek said.

He said board members will continue working with the commission to resolve the issue.

Foley hopes the commission asks board members to pay the money back.

“This is deeply disconcerting,” he said. “I can’t tell you how many times we’ve challenged people on an expenditure, and they say you don’t get it. This isn’t local money, this isn’t state money, this is federal money, as if it isn’t real money. This is real money borrowed by the federal government, taxed by the federal government and it has to be treated like public funds, which is what it is.”

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