Orem in 'good financial shape'

OREM — Independent auditors who reviewed Orem city finances for the past fiscal year told the City Council Tuesday the city was in "very good financial shape," despite the fact that Orem made several changes in its cash-handling procedures after discovering an alleged embezzlement of $50,000 from the Orem Fitness Center.

An independent auditor reviews city finances after the June conclusion of each fiscal year.

Orem City manager Jim Reams said that while a few items came up during this audit, no huge problems were found relating to the alleged theft, which was reported by the employee Nov. 28.

"We got what they call a clean opinion," Reams said. "There were some issues that they identified, but nothing that's directly related to the theft at the fitness center."

Reams said city officials recognized that the changes made after the alleged theft needed to be made.

"We began making those changes even before the audit came out and was finalized," he said.

But the auditors were informed of the alleged embezzlement immediately and played an advisory role, according to Reams.

"Of course, we had some input from our independent auditors because they happened to be here, and we just used them as a resource because of their accounting expertise, obviously," he said.

Reams said the alleged theft was reported before the audit was finalized. He was unsure whether next year's audit will address the alleged embezzlement.

"I think as long as we have our internal controls in place and properly functioning by then, I doubt it. But I don't really know," Reams said.

Because of the alleged embezzlement, Orem City will be bringing in an additional auditor who will review the city's cash-handling processes and make reports and recommendations quarterly, Reams said. A separate firm will continue conducting the city's internal audits.

The fraud investigation is expected to continue for several weeks.

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E-mail: mdecker@desnews.com