From Deseret News archives:
Eagle Mountain finance flaws found
City audit shows improper purchases
According to an audit of the city's finances dating from July 1, 2005, to June 30, 2006, a handful of city employees made several personal purchases with a city credit card while running regular errands for the city.
Eagle Mountain spokeswoman Linda Peterson said that the employees immediately reimbursed the city for their purchases and, when informed of the impropriety, stopped making the personal purchases.
The error, however, was still included in the audit.
"The auditors have to point these things out and rightly so," Peterson said. "Every year there are recommendations made by the auditors for improvements because there's no perfect system. ... But nothing came out of (the audit) where there were any investigations launched or charges filed or anything. (The audit showed) basic recommendations for things that could potentially be a problem in the future."
The audit, which was done by local firm Gilbert and Stewart and approved by the City Council on April 3, shows the city reduced its debt in 2005 to $45,390,403 — about $7.5 million less than in 2004.
But the report also found several areas in which the city should consider improving its financial practices, including authorization of employee reimbursements, review of credit card charges, review of cell phone use and review of city purchases.
According to the audit, the city's accounting system is designed to detect errors and fraud — but there are weaknesses in how the city's finances are reported.
"We noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions," the audit states. "Reportable conditions involve matters ... relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgment, could adversely affect Eagle Mountain's ability to record, process, summarize and report financial data consistent with the assertions of management in the financial statements."
After receiving the audit, the city's new administrator, John Hendrickson, issued a memorandum to city employees that reiterated the importance of following the city's policies for making purchases.
If city employees are found making personal purchases with the city credit card they could be fired, Hendrickson said.
"It's not a huge problem at all right now," Hendrickson said. "But it better not happen on my watch because that's when the personnel action will take place. If people do it now, when they know they shouldn't, they deserve to have a serious action taken, and I don't expect anyone to do it."
Hendrickson, who started as the city's administrator in March, said he started changing several of the city's methods of accounting right away, before the audit was completed. Bills of city-owned cell phones are now monitored, Hendrickson said, and employees must fill out purchase orders to make purchases.
"We're going to get it corrected," Hendrickson said.
E-mail: achoate@desnews.com
