Sarpy County starts process to remove treasurer after state audit reveals payment irregularities

PAPILLION, Neb. (WOWT) - Hours after the release of a state report showing several issues impacting more than $12.5 million in public funds in Sarpy County, commissioners on Tuesday voted to pursue legal action to remove the county treasurer from office.

A new report publicly released Tuesday morning from the Nebraska State Auditor identified numerous issues within the Sarpy County Treasurer’s Office that impacted over $12.5 million in public funds. In some cases, school districts were either severely overpaid or underpaid in property tax disbursements.

The Sarpy County Board of Commissioners met Tuesday afternoon to discuss the findings and the possible removal of County Treasurer Brian Zuger from office, voting to proceed with that process.

“As Commissioners, our priority is to protect Sarpy County taxpayers, so we take the State Auditor’s findings very seriously,” Sarpy County Board Chairman Don Kelly said in a news release. “The attestation identifies millions of dollars of funds incorrectly distributed to the schools, the cities and the county, which is why we’re exploring all of our options moving forward.”

Through his attorney Robert Schaefer, the Sarpy County Treasurer issued a statement Tuesday, saying in part: “I am deeply disappointed by the board’s decision to seek my removal from elected office... While I am sorry that we were unable to catch and fix every issue, we have already taken corrective action.”

The report from the Nebraska Auditor of Public Accounts indicates state statutes were violated. It’s up to the County Board and County Attorney on whether the findings “rise to the level of official misconduct.”

According to state auditors, the Sarpy County Treasurer’s Office failed to properly disperse a percentage of revenue paid to the county from OPPD. For OPPD, the payments are in lieu of paying property taxes.

For example, the county overpaid Bellevue Public Schools by $2.3 million and overpaid Papillion – La Vista Schools by $950,000. On the other hand, the Sarpy County Treasurer underpaid Millard Public Schools by $2.4 million. Springfield-Platteview Schools underpaid by $2 million. Omaha Public Schools underpaid by $1.4 million. Gretna Schools underpaid by $720,000.

The errors also impacted county and city budgets. Sarpy County was overpaid by $1.1 million. The city of Bellevue overpaid by $1.2 million. The same for the city of Papillion to the tune of $530,000 and $370,000 for the city of La Vista.

The 75-page report also found the Sarpy County Treasurer had failed to disperse $500,000 in fines to the school districts. State statute requires payment on the 15th of every month. Auditors found the money hadn’t been dispersed for nearly a year.

Zuger took office in January 2019 after his election. The report includes a number of responses from him. In many examples, Zuger says the issue has already been fixed or will be remedied.

The state auditor’s report found that during the six months ending in 2020, the Sarpy County Treasurer had control of where $326 million was dispersed.

Read the treasurer’s full statement

“I am deeply disappointed by the board’s decision to seek my removal from elected office. Our taxpayers put me in this position because I promised to modernize the Treasurer’s office, expand taxpayer services, and develop a culture of engaged, empowered, and high-performance employees; I am doing just that.

As early as 2019, my staff and I began evaluating all of our processes and have worked tirelessly on redesigning each and every one of them. The issues identified in the APA’s report have been going on in the Treasurer’s office long before I came to the Sarpy County Treasurer. While we have been working diligently to correct these issues, anyone who has been involved in a complete process and organizational redesign would tell you that these things take time, especially in an organization the size of Sarpy County.

While I am sorry that we were unable to catch and fix every issue we have already taken corrective action to expedite changes necessary to address the APA’s concerns. We have already made significant progress towards creating a more efficient and modern office. Employee engagement is at an all-time high and we have expanded taxpayer services, even as we climb out of the pandemic.

I am proud of the service I provide to our taxpayers and intend to continue to provide.”

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