Federal stimulus funds are only now beginning to filter through the economy, but one local law enforcement agency won’t be getting any.

The Live Oak Police Department misused federal grant money in 1996, according to the government, and is ineligible for stimulus funds for the hiring of new officers. The three-year ban has actually been in place since December 2006, and is set to expire at year’s end.

Federal Community Oriented Policing Services (COPS) funds were given to LOPD in 1996, when the agency was reestablished after a six-year dormancy. The sheriff’s office performed policing duties in Live Oak from 1990-96.

COPS funding can only be used to supplement existing police budgets. The money can’t simply replace existing funds. That’s apparently what happened here, however.

“Based on the information before us, it appears that the city reduced its total local expenditures on law enforcement services after the receipt of the … grants,” according to an audit by the U.S. Inspector General.

LOPD received $694,677 from 1996 to 2002 for the purpose of hiring new officers.

An audit performed in 2001 by the Office of the U.S. Inspector General reports that LOPD used the grant money for purposes other than the hiring of new officers.

As a penalty, the government barred the city from receiving COPS funds for three years, beginning in 2006, but ruled the city did not have to repay the $694,677.

City Administrator Bob Farley doesn’t see eye-to-eye with the feds on the matter.

“It’s the city’s stance we didn’t do anything wrong,” Farley said Thursday by phone. He insists the funds were used to add to, not replace, LOPD funds.

Farley said the city does not need stimulus dollars, in any case. He said the force is not in need of additional officers, but if it were the city could pay for them.

LOPD Chief Buddy Williams said the department has not been affected by the ban.

“It’s really nothing that affects us,” said Williams. “We’re fully staffed and if we had a vacancy we could just fill it.”

Williams was sworn in as chief in March 2007. Nolan McLeod was chief from the department’s inception until 2006.

“It was alleged that the city supplanted funds,” but the funds were used to fund a new police department.