MINDEN, Nev. – Many Nevada Fire Safe Council chapter members were already aware that federal auditors were recommending $2.7 million in recovery act grants to the Nevada Fire Safe Council be repaid when the news broke on Friday.

While investigating a July 2011 complaint, auditors from the U.S. Department of Agriculture’s Inspector General’s office found that the council did not properly account for grant funds awarded by the U.S. Forest Service, which included a $3.6 million recovery act grant and $6.2 million in other grant money.

Skyland Chapter President Ann Grant said she has been working since last fall to gather documentation requested by auditors.

“I’ve been working as a volunteer since the first of November when they let most of the project staff go on Nov. 1,” she said. “One of the other board members and I took calls from people who hadn’t been paid yet.”

Grant said the Elko chapter president was taking calls on his cell phone.

“He was getting tons of phone calls where ever he was,” she said.

Grant helped package up documentation to send to the Forest Service.

“We’re doing our darnedest to make it whole,” she said. “There are just some things that aren’t knowable. But we’re working however we can with our partners to get it fixed.”

The man who served as the council’s first director, Elwood Miller, has come back to untangle the finances of the council.

“This is a hairball that won’t get unwound,” Miller said.

Miller said the council was collecting grants from multiple sources, but wasn’t tracking what money was spent from which grant.

“Funds were requested and received from one set of grants but those funds were commingled in a common account, so bills and charges were made on other grants. We’re stymied because when the money came in, as bills came up, checks were written against the money, but there were no dogtags on that money.”

Miller said that worked until the money stopped coming in.

“All of that worked OK as long as money was available from other grants,” he said. “But the day came when requests for funds to replenish the accounts came that were made against a grant that had never been approved. Then the whole house of cards came crumbling down.”

Miller said that while money was spent on improving fire safety, no one tracked the specifics of each grant so they could provide an accounting to the granting agency.

“Can we say bills were paid in an illegal way? No,” he said. “Can we say the work done and paid for was not in line with the goals and objectives of the particular grant. Yes. It was all perfectly legitimate work and deliverables. But that the money was not tracked that way left us in a real dilemma.”

Miller said he’s not certain how auditors came up with the $2.7 million figure, but he’s not in a position to argue.

“We’re not questioning that they found that level of mismanagement,” he said. “The agency is saying ‘that money was not spent on my grant, so now you’ve got to go get it.”

That’s what Miller and the other volunteers from the council are trying to do now by seeking reimbursement from a Bureau of Land Management grant under the Southern Nevada Public Lands Management Act.

“The BLM is looking at the claim very thoroughly,” he said. “If they find the claim is legitimate and defensible, they will give us funds to pay back where unsupported funds occurred.”

But because of the grant tangle, the Forest Service has shut down access to additional funding.

“We’re in a very precarious position right now,” Miller said. “How fast these agencies are going to move leaves us kind of hanging.”

Grant said that it will be May or June before work begins again at Lake Tahoe, and she’s hopeful that the mess can be cleaned up by then.

“There have been so many people working day and night trying to get this cleaned up for quite some time,” she said. “Nobody really knew that it wasn’t going well until all fell apart.”

While founded in 1999, it has only been 10 years since the Fire Safe Councils started to take off.

“The fire safe council has been a godsend to these communities,” Miller said. “It has served as fiscal agent for them, while people in the community have been able to rally the support of the neighborhoods, without which it would go nowhere.”

The council handled contracting and project coordination for the 135 chapters and 5,000 individual members.

“The council did all the other stuff that needs to happen to get project work done and fire threat reduced and hazardous fuels treated,” Miller said. “Honestly, the council members thought it was going fine, thought it was being handled.”

While the auditors’ report said there were errors in handling grants, there was no finding of fraud.

Fire Safe Council board chairwoman Joan Presley said the grants have funded work that has been credited with saving homes and property.

“The funds expended helped reduce the potential loss of life and property by educating, empowering, and enabling citizens to do defensible space work around their properties,” Presley said.

Grant funds were used to hire local contractors and support individual homeowners in removing flammable fuels in Nevada and at the Lake Tahoe Basin.

“Essentially, poor accounting and fund source tracking procedures were revealed by the OIG investigation,” Presley said. “The funds received by the council were used to support the core mission of the council, community wildfire preparedness, and the community protection goals of our funding partners.”