JEFFERSON CITY, Mo. (AP) -- A state audit says the Agriculture Department circumvented state laws by trying to use the wrong fund for a sexual harassment settlement.

At issue was a settlemet between the department and former employee Heather Elder, who had accused then-Agriculture Director Fred Ferrell of sexual harassment.

The Agriculture Department initially tried to settle the claims from the Agriculture-Federal and Other Fund account.

In a report released Wednesday, auditors said that settlements should come from the Legal Expenses Fund, which is controlled by the attorney general's office.

The Agriculture Department says the attorney general's office stalled and its only option was to tap into the other fund.

However, the state eventually used money from the legal fund to settle Elder's claims.