By Robbie Ward
TUPELO – A federal agency confirmed Tuesday an open investigation into the labor practices at the North Lee County Water Association.
The U.S. Department of Labor confirmed to the Daily Journal an investigation likely related to employees not paid full wages for two years.
An investigator with the Department of Labor spent most of Tuesday at the rural water association’s Saltillo office reviewing documents and interviewing employees.
“I can confirm the wage and hour division has opened an investigation,” said Michael D’Aquino, an Atlanta-based Department of Labor spokesman.
He would not disclose any additional details related to the investigation.
The investigation begins after the Daily Journal reported in April about financial mismanagement, broken laws and noncompliance with a federal $1.2 million U.S. Department of Agriculture Rural Development loan.
A Fiscal Year 2013 audit revealed North Lee’s financial problems, including reports the company shortchanged employees’ pay for two years.
“In our sample of 109 invoices, the Association … miscomputed 33 of 43 paychecks resulting in underpayments of $691.33 …” the audit stated related to 2013.
The audit also reported similar findings from the previous year.
“The Association should review time cards for proper time calculations and adjustments when necessary,” the audit stated related to issues identified in Fiscal Year 2012, saying it “is still a finding in this report.”
Federal law generally limits recovery of back pay owed to a two-year statute of limitations.
The secretary of labor can sue the water association for twice the amount owed workers if the investigation finds North Lee didn’t pay workers for time owed and can also issue a court order demanding no further violation of the Fair Labor Standards Act.
North Lee manager Jim Banker stood outside the company’s front door Tuesday and stared toward the outdoor shop where the investigator privately interviewed employees. Banker disputed that the water association was under federal investigation.
“We knew he was coming,” Banker said. “This is a routine audit.”
Banker then referred questions to North Lee Board of Directors President Terry Anderson, who didn’t respond to the Daily Journal’s request for comment.
However, Anderson previously didn’t dispute employees worked without receiving pay when he provided written responses nearly a month ago to the Daily Journal about the nonprofit cooperative’s financial mismanagement outlined in the audit.
“The work day at North Lee begins at 8 a.m. and employees who report early, understand that it is for their own convenience,” Anderson wrote.
North Lee’s leadership has hesitated to discuss findings in the audit, a public document, and even disputed the audit is a public record. That the audit is a public document was confirmed by federal officials and Mississippi Rural Water Association CEO Kirby Mayfield.
North Lee employee and whistleblower Sonny Noble provided a copy of the audit to a Daily Journal reporter and was fired the morning the newspaper published an article about information revealed in the document.
Anderson has declined to discuss Noble’s termination, but the employee of nearly six years believes he was fired for sharing a public document. Noble gained notoriety in 2011 when he helped expose mismanagement and corruption at the water association that led to a federal investigation of criminal wrongdoing and the resignation of the entire nine-member board of directors.
Then-manager Dan Durham was sentenced to three years of probation after pleading guilty in 2012 to falsifying federal water quality reports. Employees at the water association the same year received back pay owed for working on private property owned by then-board President Mitchell Scruggs.