Commissioners release bed tax to fair board

FINDLAY — The Hancock County Board of Commissioners voted last week to release all previously withheld bed tax funds to the Hancock County Agricultural Society and to resume regular payments through 2026, despite ongoing concerns about the fair board's financial reporting. Commissioners Tim Bechtol and Bill Bateson supported releasing both the 2025 funds that had been held back and the first-quarter 2026 installment. Commissioner Jeff Hunker voted against releasing the 2026 funds, citing unresolved issues in the board's accounting practices. The commissioners originally voted in August to temporarily withhold the hotel-motel "bed tax" after the Ohio State Auditor's Office deemed the HCAS's 2021-2023 financial statements "unauditable." A subsequent audit of the 2023-2024 records, released in early May, identified recurring material weaknesses and thousands of dollars in reporting errors that auditors said stemmed from problems previously flagged but not corrected. While a material weakness issuance does not mean fraud has occurred, it does mean it is worryingly more likely. Historically, HCAS has received 1% of a 6% county bed tax with the other 5% tax divided between the Marathon Center for Performing Arts and the county visitor's bureau. The funds were first allocated to MCPA and HCAS in 2015 and must be used for capital improvement projects. The bed tax agreement with the visitor's bureau has been in place since 1988. Just before Christmas, commissioners voted to renew a memorandum of understanding to continue to allocate bed tax funds to the HCAS, pending audit results and with the stipulation that the report would be clean and would not have "major findings." "These errors were the result of inadequate policies and procedures in reviewing the financial statements," the auditor's reports said. "Failure to complete accurate financial statements and notes to the financial statements could lead to the board making misinformed decisions." The report does indicate the HCAS was working to correct the errors, but further oversight is needed to help prevent future errors. Statements from the HCAS released only moments after the audit report indicated the board is happy with the results and that the board believes their financial records are "solid and above reproach." A June 2 letter to the commissioners requested release of the withheld funds and included a five-year capital improvement plan with an overview of both completed and proposed projects on fairground property. This plan included renovations made to the junior fair building and restroom facilities and the construction of a shower house in 2024, renovations made to a food service building and the installation of concrete flooring in 2025. The plan also said the fair board hopes to make improvements to a horse barn and Merchant, Grange and Buckeye buildings and expand a multi-species livestock barn. Plans for 2027-2030 include the construction of a gospel pavilion, multi-purpose event center, replacement Merchant and Grange buildings and paving a parking lot near Sandusky St. On Thursday, Hunker said he believed some errors had been corrected but could not be certain the errors had been fully resolved. "The (financial records) are an ongoing issue," Hunker said. "... I don't know if they have fully corrected their internal issues." Hancock County Auditor Charity Rauschenberg, who was in attendance at the commissioners' meeting, proposed the idea of a back-to-back audit of the board's records to give the commissioners further clarification on accounting procedures. According to Rauschenberg, an audit of the fair board's 2025 financial records will show whether or not the HCAS was "making progress." "When you walk into a mess, it takes some time to get things organized and then moving forward," she said. Hunker said he was not in favor of continuing allocation of funds to the fair board because he believed they needed time to "get themselves in order." He said, as a public official, he wanted to ensure public dollars were spent appropriately and the community organizations were being "good receivers of funds:" Rauschenberg said currently the county is holding approximately $263,000 in bed tax funds for the fair board, which includes three-quarters worth of funds that were withheld in 2025 and the first quarter of 2026 funds. The letter to the commissioners outlines the amount of bed tax funds received and spent by the HCAS since 2022. Between January 2022 and the beginning of 2025, the fair board received almost $863,000 of bed tax funds and spent almost $858,000, mostly on the Old Millstream Center. As of June 1, the letter said the HCAS has $5,300 remaining of the funds. Commissioners directed Rauschenberg to release all withheld bed tax funds to the fair board and to release future installments through 2026. The board will have to reissue a memorandum of understanding for the release of funds in 2027. Although the financial audit is complete, the Ohio State Auditor's Special Investigations Unit is still conducting a separate forensic audit of the agricultural society. The Ohio Department of Agriculture has also confirmed an ongoing investigation. Both agencies said they cannot comment until their findings are made public.