State office finds revenue missing, city policy violations
WASHOUGAL — The Washington State Auditor’s Office is investigating thousands of dollars of potentially illegal expenditures and more than $100,000 of missing revenue from city-sponsored events in Washougal.
The investigation comes on the heels of an accountability audit, the findings of which were released Monday. Washougal Mayor Stacee Sellers called the findings premature at a city council workshop Monday evening, but many of the council members had harsh words for the city’s administration.
“My trust has been totally eroded in the leadership,” Councilor Molly Coston said. “I run my household with better information. It’s frustrating, and it’s embarrassing.”
The auditor discovered that the city could not account for money collected during several city-sponsored community events and made questionable expenditures and gifts of public funds. The auditor’s office found charges to city credit cards and expenditures that could not be validated or were not permitted by city policy. The audit looked at various areas of city activity from Jan. 1, 2008, through Dec. 31, 2008.
The findings prompted the special investigation into the missing revenue, which the city is required by state law to report to the auditor’s office, said Mindy Chambers, spokeswoman for the auditor’s office. The investigation could take four to six months depending on what is found, she said.
The cost is up to $35,000, which includes the accountability audit and the annual financial audit but does not include costs for the special investigation, Chambers said.
“Since the money is missing and the city didn’t tell us, we have to go take a look,” she said.
According to the auditor’s estimates, Washougalfest 2008 and Riverfest 2009 should have generated at least $100,000 in revenue but the city did not deposit revenue from either event, with the exception of one Riverfest sponsorship receipt for $5,000. The city also has not deposited any revenue from the summer 2009 Washougal Main Street Market.
The city spent, not including staff time, more than $120,000 for the 2008 Washougalfest and more than $26,600 for the 2009 Riverfest. In addition, the city paid a local nonprofit organization — Washougal Downtown Revitalization and Implementation Committee — $75,000 in 2008 and $50,000 in 2009 to help coordinate those events and other smaller events, according to the findings.
Sellers said at the workshop Monday night that DRIC used the revenue to offset other expenditures it incurred on behalf of the city. If any additional money was left, she said, it would have been deposited with the city. DRIC is working with the auditor’s office and is providing documentation of how the money was used, Sellers said.
The auditor’s office also found that city officials and employees are not complying with city policies.
After receiving constituent inquiries concerning Sellers’ expenses, the auditor’s office reviewed Sellers’ and other employees’ expenses. In the review, four of Sellers’ credit card statements with $2,378 in charges could not be found in city files and couldn’t be validated.
The office reviewed $89,603 in charges to credit cards and expense reimbursements of city employees and officials and noted concerns with charges for meals and other expenditures.
Sean Guard, who is running against Sellers for mayor, filed a “citizen hot line” complaint with the auditor’s office in August. He questioned Sellers’ expenses, particularly money spent on meals and the use of her city-paid cell phone. The findings, he said, echoed what he discovered when he started filing public records requests for city documents.
“It’s unfortunate,” Guard said. “You’ve got a couple of individuals at the city who’ve decided they’ve got their own way of doing things and have stripped the city of having oversight when it comes to expenses and some other things.”
In the auditor’s findings, the city responded by saying it operated under the belief that the current personnel policy did not apply to elected officials.
The auditor, however, said that the city’s current travel and meals policy specifically states that it applies to city officials and employees, and state law requires detailed documentation of expenditures of public funds.
At the workshop Monday, Sellers said the city has already begun to address some of the problems by changing personnel policy and tightening internal controls but admitted that many things slipped through the cracks.
Council member Jon Russell said he believed the findings showed that the problems were bigger than oversights.
“I don’t think these are cracks, they’re craters,” he said. “It looks like a pattern that is not being dealt with and that is not being brought to the attention of the council.”
Russell said he wants the council to hold a special meeting to look into each problem and discipline responsible parties, even ask for resignations if necessary.
“I don’t see how we can trust this administration in moving forward with anything,” he said.
