The county made a $566,000 payment, but it didn’t go where it should have

Sedgwick County spent more than half a million dollars twice in October to pay for one road project, triggering a fraud investigation, records show.

The amount – $566,088.90 – matches what the county lost to fraud more than a month ago. The incident, which involved the county’s finance department, is under investigation.

Sedgwick County sent an electronic payment of $566,088.90 to Wichita construction company Cornejo & Sons on Oct. 7, according to a record obtained in a Kansas Open Records Act request.

It went through the automated clearing house or ACH, which is the electronic network for financial transactions in the United States. Governments and businesses use the network to batch transactions together to pay for things like benefits, payroll, bills and business transactions.

“The ACH payment was made to Cornejo & Sons and it didn’t reach the company,” said Sedgwick County public information officer Kate Flavin.

Records show county staff realized it on Oct. 25.

“Cornejo called again this morning and said that this payment still hasn’t been made,” a county public works employee wrote to a finance manager in an e-mail at 9:15 a.m. Oct. 25.

“As soon as the county realized that, we notified the sheriff…and that’s when the investigation started,” Flavin said.

At 5 p.m. that day, deputy chief financial officer Rick Durham reported to the Sheriff’s Office that Sedgwick County was a victim of “theft by deception,” with a loss of $566,088.90.

Sedgwick County made the case public the next day, saying it had been the victim of fraudulent activity.

The county also sent a check to Cornejo & Sons for $566,088.90 on Oct. 26. The check was cashed on Oct. 31.

It’s unclear where the first payment was sent. The bank number and other financial information for both transactions were redacted by the county, which cited an exemption to the Kansas Open Records Act.

When asked about the transactions, the company’s assistant finance manager, Sharla Jones, said she could not comment.

“There’s an ongoing investigation,” she said.

Cornejo & Sons would not comment late Tuesday afternoon.

County officials would not say if the money had been recovered, if county personnel were disciplined or if any internal policies were changed after the fraud was discovered.

Cornejo & Sons won a $550,064.19 contract in June to work on the “Bond Tekk” project, part of the county’s preventative road maintenance.

Public works director David Spears said the project focused on about eight miles of 53rd Street North between Andale and Maize with the exception of the street that runs through downtown Colwich.

“They extend the life of the pavement. That’s the whole idea,” Spears said.

The project later saw an increase of $16,024.71 to bring the total cost to $566,088.90.

A records request showed the two payments were the only Sedgwick County transactions this year that involved the amount in the fraud case.

Lt. Lin Dehning of the Sedgwick County Sheriff’s Office said this week that there was no new information to release.

“This is one of those things that takes time,” he said.

Dehning said the FBI was still involved in the investigation and that no arrests have been made.

Contributing: Amy Renee Leiker and Dion Lefler

This story was originally published November 30, 2016 at 3:02 PM with the headline "The county made a $566,000 payment, but it didn’t go where it should have."