Additional letters and emails have come to the Seward County Board of Commissioners’ attention showing that as early as June 2024, the U.S. Department of Treasury had questioned Seward County Interdiction program “impermissible salary expenditures” totaling $762,504 over fiscal years 2021 to 2024.
In addition, it indicates that the Seward County Sheriff’s Office continued to expend funds and submit data for reimbursements after being designated a “do not spend” agency for Treasury disbursements in 2024.
Though Commissioner Raegan Hain said she is concerned about retaliation because of the subject matter, she shared a four-page timeline she compiled based on information she and other commissioners have received since Aug. 19.
Hain said on Aug. 26, she takes her oath of office seriously and asked the commissioners to revisit the 60-day timeline they gave themselves to review data before signing off on the sheriff’s annual Equitable Sharing Annual Certification (ESAC) report for 2024-2025 which is submitted to both Treasury and the U.S. Department of Justice.
“The withholding of information and lack of transparency from the Seward County Sheriff has caused the board to take action on items that should not have been done,” Hain wrote in the letter.
Though the board declined to extend the hold on the report until February, Commission Chair Misty Ahmic asked Hain and Commissioner Scott Pekarek to meet with Sheriff Mike Vance to assess where the county stands and what needs to be done, asking them to report back Sept. 2.
In a later interview, Ahmic said the board has also received the audit it hired Nesbitt & Associates of Lincoln to undertake last April, but has not yet discussed the findings in a meeting.
The scope of that audit is the federal forfeiture or equitable sharing program funds managed separately by the sheriff and the county attorney. At the time, Hain said rules had changed at the federal level and she wanted to be sure the county had made any needed adjustments to be in compliance.
Pekarek had expressed concern that if the department does not submit the ESAC report on time and is out of compliance, no funds will be disbursed from either Treasury or Justice and the county would have to budget more for the 2025-26 fiscal year to cover interdiction program expenses and the costs associated with the sheriff’s department's building near Milford.
But Ahmic reminded board members that they had come to an agreement on a general fund budget amount for the sheriff’s department and Vance has said he will make that amount work.
“This is not me saying I am for or against signing this, I just want to be clear,” Ahmic said.
The one budget element they had not determined was the number of sworn deputies the department would be allowed, a function the Legislature has assigned to county boards, though Vance has questioned that on more than one occasion.
The board voted 3-2 with Hain, Ken Schmieding and Darrell Zabrocki voting to cut the number of sworn deputies authorized from 20 to 18. Pekarek and Ahmic voted against the action.
Vance will determine how he will allocate those positions, though in recent years, two positions were assigned to the interdiction task force and three positions were funded through the Department of Treasury reimbursements now in question as “replacement” positions for those assigned to interdiction. The department has said the replacement positions have school resource and Drug Abuse Resistance Education (DARE) responsibilities.
Pekarek noted the county has two weeks to finalize its 2025-26 budget.
“I know that we don’t all think that the task force is the greatest thing out there, but why would we walk away from this?” He noted the funds received in the past and believed to be due now.
He said he had contacted the Department of Treasury to obtain additional county-related documents, but was told they could not send him any due to a Freedom of Information Act request. Such a filing is used by individuals and groups, including media, when documents people believe to be public in nature are not shared.
Vance said even if the department can regain its compliance after the deadline, “it’s not going to be a quick process.”
Hain said the delay on signing the certification report is needed to accomplish three things: 1) thorough review of all documents to and from the Treasury Department, 2) thorough review of the Nesbitt & Associates audit, and 3) determining how oversight of department expenditures will be handled moving forward, either with a review panel or implementation of a purchase order system.
In addition, her letter to the commissioners listed three areas of the 2025 ESAC report for which clarification is needed: The reasons for reimbursements made to Justice ($1,273.76) and Treasury departments ($6,566.31); the RAP payback of $31,600 which was transferred from the department’s sinking fund; the listing of sale proceeds sent to Justice ($5,600) and Treasury ($9,491).
She also noted a correction the Treasury Department indicated should be listed on the ESAC is not included in the version the county now has.
The timeline Hain shared included:
• July 31, 2025, e-mail – A letter from the Department of Treasury with the heading Re: Follow-Up to Treasury Executive Office for Asset Forfeiture Letter Dated May 30, 2025. This indicates that Treasury identified $762,504.32 in equitable sharing funds for non-qualifying replacement officers during fiscal years 2021-2024. Due to the amount and “complexity of the issue” it said the sheriff’s office was given a “do not spend” status until the issue is resolved. It also indicated the department has $729,291.93 in equitable sharing funds pending for the county and “this office will extinguish these pending disbursements and reevaluate at year-end to determine if there are additional disbursements to offset the outstanding repayment of $33,212.39.”
• May 30, 2025, letter – A Department of Treasury letter sent to Vance with the heading Re: Follow-up to Report on the Seward County Sheriff’s Office of Equitable Sharing Compliance Review Letter, which indicates that a review was completed June 17, 2024, and a letter had been forwarded to the county raising issues related to controls and procedures associated with the management of the Treasury funds and asking for a written acknowledgement confirming the sheriff’s office’s understanding of the requirements and specific information and documents.
This letter indicated some questions had been resolved related to inadequate segregation of Treasury Equitable Sharing Funds for advance payments/loans, suspension and debarment requirements and non-conforming expenditures relating to a confidential funds account, and an impermissible payment to Fillmore County.
But it also said “we are concerned with the significant amount of Treasury equitable sharing funds that have been used to pay for salaries of SCSO personnel that did not qualify as replacement officers.” It itemized $236,104.33 spent in 2021 and 2022, $338,374.84 in 2023 and $188,025.15 in 2024, creating the total of $762,504.32
The letter indicated the Seward County response had been a request to “either waive the discrepancies with the acknowledgement that these errors will not happen again, allow the SCSO to submit other wages that may qualify in place of the ineligible wages or agree upon a payment plan because of the hardship it would cause the county.”
• June 17, 2024, letter – The Department of Treasury letter to Vance discusses the compliance review objectives, approach and conclusions, which Hain said were extensive. She said it included instructions to include $267,704.23 as “other income” on the department’s next ESAC report, but that line item is not included in the 2025 report the commissioners were reviewing for signature.
• Undated letters – Hain said she received copies of undated, unsigned letters from Vance to the Treasury Department referencing attachments he was sending in response to the review, but she had not yet seen the attachments.
Hain, who said in her letter she is neither an attorney nor an investigator, said the county needs to more thoroughly review the information now available and requested before the 2025 ESAC report is signed by the board chair.
The program dealings with the two federal departments is tied to the money seized by the Seward County Drug Interdiction program, which is sent to the two departments and the Seward County Sheriff’s office and Seward County Attorney’s office are among the participating offices in the program that receive a portion of those funds back.
To remain compliant with program rules, the annual ESAC report must be signed by Vance and the chair of the board of commissioners and turned in within 60 days of the close of the fiscal year, which ended June 30, though the county attorney has said if it is late he can still become compliant in the coming year.
Vance said Aug. 19 that if the report is not completed, the asset forfeiture program may not be able to operate because funds would not be disbursed to his department. As the commissioners and sheriff have discussed budget matters since June, Vance has said he expects disbursements totaling up to $5 million from the two departments at any time and had not received significant disbursements for some time. He had received small reimbursements.
