By FRANK LEWIS

PDT Staff Writer

U.S. Department of Agriculture officials are still not commenting on allegations of Southern Ohio Growth Partnership improperly using restricted loan funds. A USDA spokeswoman said the agency would not comment when their official audit is ongoing.

Heather Hartley, public information coordinator for Ohio USDA, said Monday morning, there has not been a lot that has happened in the interim since an audit in January revealed restricted loan funds had apparently been used to cover SOGP operating expenses — a discovery that reportedly led the SOGP board to remove President and CEO Bob Huff.

“We’re still working to discover the best and proper course of action,” Hartley said. “The formal audit is still in process. So because of that it would be inappropriate for us to make a comment beyond that at this time.”

SOGP Board President/Treasurer Mike Gampp said when the Board discovered the funds had been improperly allocated, members immediately contacted the U.S. Department of Agriculture (USDA), engaged an independent auditor, and assumed responsibility for the day-to-day operations of SOGP.

In late February, Jennifer Sonnenberg, acting Business and Cooperative Programs director with USDA, said the USDA lends money to groups such as SOGP and when those funds are repaid, SOGP is allowed to use the interest to help fund operational costs, such as for salaries, expenses and facility. However, according to Gampp, SOGP was using the loan principal, not just the interest, for operating expenses, and had been for years.

Huff was asked about being accused of improperly using restricted loan funds.

“I’m disappointed they (SOGB Board) would make a comment like that,” Huff said when reached following the discovery. “I have no comment, as far as I’m concerned, I’m retired.”

Meanwhile, Gampp said the Board is moving forward.

“We are working with all our partners to better understand and resolve this matter,” Gampp said. “We are confident that a resolution will be found.”

Gampp said despite several years of audits from private firms, the discrepancies apparently went undetected until recently. It was on Feb. 2, 2012, that the detection of the issues led to a special meeting of the Board with an outside auditor present.

When asked why that practice is just now coming to light, Sonnenberg said their audits didn’t show anything obvious.

“We rely on the outside auditors to provide us with an audit each year, as part of the intermediary re-lending program, the rules require that our borrowers provide us with financial statements annually,” Sonnenberg said.

SOGP is located in the Scioto County Welcome Center on Second Street, which brought into question the future status of the Portsmouth Area Chamber of Commerce, which operates out of the same facility.

“Southern Ohio Growth Partnership is the development arm of our organization. And obviously their board is our governing board,” Chamber Administrator Lisa Carver said. “But we have always worked very hard to make the Chamber the focal point of the community. Our functions are very different. SOGP is mainly economic development. The Chamber of Commerce is basically the platform for our members to network, to have a voice together. And anything that’s happened with SOGP does not change our goals or our standing in the community. The Chamber is a very sound organization by itself.”

Gampp said he is confident the entire scenario can come to some resolution, hopefully one that will be advantageous to all parties involved.

Gampp said if USDA’s confidence in the board continues, “What happens is that USDA will approve our budget to allow us to receive some operating expenses from the administrator of the program, because the existing loans still have to be taken care of,” Gampp said. “Someone still has to collect the payments. And someone still has to manage that portfolio. So we have to get some reimbursement of expenses for that, which is all fully appropriate. As long as you budget for that and get approval for it from the USDA, there is nothing wrong with that. So we’re waiting for that.”

Hartley said there is no actual time frame as to when a decision is expected.

Frank Lewis may be reached at 740-353-3101, ext. 232, or at flewis@heartlandpublications.com.