Horner and Williams came to an agreement after meeting with Mayor Jim Kalb on Friday.
The Mandatory Fines Fund and the Law Enforcement Trust Fund contain about $240,000. But $50,000 already was in Williams' care.
Horner must now go to Williams to request any money from the funds, just as all other city department heads do. Before the agreement, he controlled the money and how it was spent.
Horner said he is happy with the agreement.
“It is important to point out clearly that this is being done because of the city charter,” he said. “It specifically says that the auditor will handle all of the funds. The charter says that, and all of us believe in supporting the charter. That is why the money is being moved to the auditor.”
The transfer will take place next week, Williams said.
On May 8, Williams ordered Horner to turn over the funds and close the accounts.
The Ohio auditor's office had been looking into the funds, Williams said, and hired the firm of Ballestra, Harr and Scherer on Wednesday to examine them.
“This will take care of the charter requirement,” Williams said. “The state auditor was much less concerned with the checking account the money is in than with not having the money recorded and run through the books of the city auditor.”
On Thursday, Williams sent Kalb a letter asking him to make Horner turn the money over.
Horner said he uses the funds to buy routine items needed by the police department, including computer equipment and office supplies.
He also said it will be used if the city is affected by the bird flu pandemic.
Horner said $50,000 from the accounts is used to fund the D.A.R.E. drug prevention program. The city does not have the program, but Horner said he plans to reinstitute it.
The money from the funds will be appropriated by Portsmouth City Council each year like other city funds are.
Most of the money comes from crime forfeitures and seizures. The city has operated the funds since the early 1990s.
Horner also said he had concerns about how the funds were managed when he became chief in 2002.
“I asked him (Williams) to come down and direct me and give me guidance on how to manage those accounts,” Horner said. “At that time, I assume he was under the same impression I was, that it was OK.”
Williams said he agreed back then and that Horner was managing the funds no differently than previous police chiefs had.
But Williams previously said he began looking into the funds after a complaint by a citizen.
Horner said he was concerned that the issue could affect his credibility. But Kalb said that is not the case.
“I never had a thought that the money was being misspent,” he said. “I had no question that the chief was spending money as provided for by law. I think he's been prudent with the money, and I think he's happy to have this behind him.”
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