State Auditor’s Report

As many of you remember, last February a resident distributed a report which chronicled a long list of perceived wrongs which he felt had betrayed residents trust. The “Utility Scandal” report as you may recall was inflammatory and quick to make judgments about many different topics. Specifically, the report accused the city staff of fraudulently transferring funds from the Enterprise Funds to the General Fund. The report asserted:

“when Eagle Mountain’s mayor, city council, and administrators want to spend extra money, they rarely try to raise property tax revenues because doing so is politically hazardous thanks to the state’s stringent Truth in Taxation requirements. Instead, they usually raid the city’s utility funds, which are often flush with cash, because they have set some of the highest rates in the state.”

While I still do not know the true motivations of this resident, I do know that the claims have been reviewed by the State Auditor’s office and have been deemed to be unsubstantiated. This was the position of the City at the time the claims were levied and I am glad that the audit has affirmed this and it is now behind us. The State Auditor’s report is available here if you would like to read it.

With respect to expenses paid for the PRCA awards banquet in 2011, my wife was employed by the city and worked in the events department. In the interest of full disclosure she attended a convention related to fairs and I flew in to Las Vegas (on my own dime) to spend the weekend with her. At the conclusion of her conference, she and I were invited to attend the PRCA awards banquet and we both attended, though our tickets to that event were “comped” as this was a last minute consideration. There was no expense to the city or we would not have attended. Neither she nor I attended the NFR, or caused any additional expense to the City.

I would like to say thank you to the city staff for the tremendous efforts they have made in working through this audit. Specifically, I would like to thank our finance director, Paul Jerome and his staff for meeting the obligations of this audit while simultaneously completing the annually required audit, and also organizing, preparing for and leading the annual budget process.

While the State Auditor found the allegations regarding the utility fund transfers were unsubstantiated, they did make recommendations in a few other areas. I will refrain from giving any commentary on those as I think the report and the respective replies speak for themselves. I will say that I believe most of those items were interrelated and are no longer an issue.

8 thoughts on “State Auditor’s Report

  1. As an accountant, there is nothing more important than maintaining a paper trail and signing off on spending, especially when it comes to an audit. With 38 of the 59 tested expenditures not having adequate back-up, that is a scary problem. Since this was an event audit and not a control audit, that’s good. But really, every business needs to keep their books and spending under wraps.

    I hope that the accounting of things like this going forward will be met with more prudence. Good luck Mayor Pengra!

    • Thanks for your comments T.J. I agree with you completely and I am happy to tell you that I have had many conversations about this with our finance director. Paul Jerome took the position of Finance Director only 1 month before Pony Express Days of 2012 and made significant positive changes for the following year. I think it is safe to say, given the fiscally conservative direction we are heading, I won’t be asking the taxpayers to foot the bill for anything like this!

  2. Well, I hope that the city will report those costs as taxable fringe benefits, or better yet, get the Jacksons to reimburse the city. And after reading your response, it looks like a lot of smoke and mirrors. I saw a lot of “we’ll look into thing”, but not a lot of “this is the direct action”. So sad.

      • LGLH, I will be leaving any salary over 50k in the General Fund as a donation. As stated during the campaign season, I am getting health insurance from the city right now, though I will be switching to health care from my wife when it becomes available. I will not take any more than 50k in wages, not including the health care premiums that I have paid. After I am no longer using the city health care, I will continue to take only 50K in wages. I hope that is helpful.

      • That is helpful. Thank you. Also, I really appreciate your actions regarding PED. That is something I can agree with. Good job!

    • LGHL, I can appreciate your skepticism on the solutions, though the reality is most of these issues are no longer issues. The voters elected me to be fiscally responsible and that is exactly what I will be. I won’t be using tax payer funds to attend any event that could be considered entertainment. Even if it isn’t entertainment. There is not one part of my being that isn’t disappointed with the money that was spent on a grand scale toward these events. I won’t try to convince you with my words though. I’ll just let my actions speak for themselves as we move forward. If you watch the most recent city council meeting, you will hear my position clearly on the rodeo.

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