Western Nebraska village didn’t make municipal bond payments for several years, state auditor finds

The Nebraska Auditor of Public Accounts (APA) released a letter Wednesday outlining a mismanagement of funds in Brule, a village of 330 residents in Keith County just west of Ogallala.

The 19-page document lists a variety of infractions, including the alleged misappropriation of village funds, potentially disallowed payments and unapproved pay rates.

The letter also noted the village’s failure to make payments on a 2019 general obligation water bond.

According to the APA, Brule hasn't made any principal payments on the water bond since its issue.

Of the $81,640 due in fiscal years 2022 and 2023, only $18,740 was paid to cover interest, despite the village budgeting $88,000 for bond payments over those two years.

“By making no bond principal payments, as well as underpaying the interest owed, the village continues to accrue interest on both the unpaid principal amount and the actual interest specified in the debt service schedule,” the letter read.

Deputy Auditor Craig Kubicek, who worked on the audit, said many of the issues in Brule are typical in village audits, but the total volume of infractions is concerning.

“If you look at our website and the letters we issue, I would say some of these things are pretty common,” Kubicek said. “Now, not paying interest on a bond? I don't see that very often.”

The APA lacks the authority to bring charges for infractions outlined in the letter, but the Nebraska Attorney General, Keith County Attorney and Nebraska Accountability Disclosure Commission were notified for potential follow-up action.

In March, a recall election of two village board members was unsuccessful and village clerk Vicki Malmkar announced her resignation.