Craighead County is pulling nearly $1.4 million from its reserves to replace the money officials allege was embezzled from its payroll holding account by the county's former clerk.
County Judge Marvin Day confirmed Tuesday that the money will be used to pay interests and penalties to the Internal Revenue Service, the Arkansas Department of Finance and Administration and the Arkansas Public Employees Retirement System.
About eight weeks ago, Kade Holliday, the former Craighead County clerk, was charged with 13 counts of property theft and one count of abuse of office. He is out of jail on $150,000 bond and is awaiting trial.
The criminal charges and Holliday's resignation came in late June.
The Craighead County Quorum Court on Monday passed the appropriation ordinance, which allowed for the county to dip into its reserves, Day said.
"If you look at the money that was taken, we still have a liability there and have to get that paid," Day said.
"Unlike other counties, we are blessed to have some reserves, unallocated monies," he added.
On March 28, Jonesboro, the largest city in Craighead County, was struck by a tornado, resulting in several leveled homes and businesses -- including a shopping mall. Craighead County also has had to contend with costs associated with the coronavirus pandemic. Regardless, those two crises didn't translate into any significant withdrawals from the county's reserves, Day said.
By comparison, far more is being taken out of reserves as a result of the alleged embezzlement, he noted.
Before the latest withdrawal, the county had about $17 million in reserves, but a large chunk of it, about $7 million, is earmarked for specific purposes. That meant the county had about $10 million to use for such an emergency, Day said.
A probable-cause affidavit states that Holliday began transferring thousands of dollars from the county's payroll holding account to his personal account in January. He continued moving money until June 24, shortly before his arrest, authorities said.
The county also sued Holliday to recoup the money he is accused of stealing. Earlier this month, a judge found Holliday in contempt of court because he failed to provide a complete accounting of funds he had been accused of stealing, according to court documents.
Authorities said Holliday stole roughly $1.6 million from the county.
Day said Tuesday that the civil case has been moving forward.
Holliday, a Republican, was elected to the office in 2012 at the age of 24. He was seen at the time as a rising player in local and state politics.
While he worked for the county, Holliday was in charge of submitting payroll reports, officials said.
Holliday also had invested in businesses in Jonesboro. In addition to the suit filed against him by the county, Holliday was sued by Total Healthcare, a food-plan business for which he was minority owner.
The founder and majority owner of Total Healthcare, Rose Hankins, stated in court documents that Holliday had severely depleted the company's business accounts, causing it to almost certainly shut down.