Overspending, missing records

Problems with overspending and missing records were unveiled in Union Gap's latest audit report, and city officials hold former Mayor Aubrey Reeves responsible.

"The mayor felt he was above the council and wasn't bringing things to the council like he should have, by law," Mayor Jim Lemon said. "He did a really poor job of running the town."

The city has about 60 employees and operates on an annual budget of about $25 million. The report, issued earlier this week by the Washington State Auditor's Office, analyzed the city's financial records from Jan. 1, 2004, through Dec. 31, 2006.

Auditors found that department budgets were not monitored, resulting in funds being overspent. Several million dollars were disbursed without the council's authorization, and vendor records had been purged after three years instead of the required seven.

In addition, a three-year federal grant was not used to keep a police officer at Union Gap School, as intended. According to the audit findings, the officer was at the school for only about 16 months.

Now the city must inform federal authorities about the mistake and may have to pay back $20,832, said Mindy Chambers, spokeswoman for the state auditor's office.

Reeves, who is vying for the 14th District legislative seat, said he was confused by the findings. No other state audit -- including extra ones paid for by the council -- revealed any of these issues, he said.

"I'm shocked," he said. "How can you correct anything when you were told everything is fine?"

Chambers said there's no evidence that money was stolen or is missing. Instead, the auditor found "really sloppy bookkeeping." She added that some of the problems can be explained by a high staff turnover, and that she's pleased with the city's attempts to remedy the mistakes.

"The city should monitor its financial decisions," she said. "It should record these things properly."

Lemon and Councilman Dan Olson said they found the audit results troublesome and are taking steps to fix the mistakes. This includes hiring a former state auditor to help their treasurer with the budget, informing department heads to watch their spending and putting more safeguards in place to track where money goes.

"I have a lot of concerns with the way things were happening in the past," Lemon said. "Transferring funds from one fund to another fund won't happen any longer without council authorization. I've pretty much drilled it in their heads we will abide by the law."

Reeves said he's always followed city procedures and had paid back interfund department loans with interest, as required by law. He further maintains that the council gave authorization for all unexpected expenses.

"I'd have to understand the findings better before I take responsibility," Reeves said, adding that he relied on other, qualified professionals to manage the budget. "As far as I know, we went by the book."

Reeves said he had no knowledge about records being destroyed, nor did he know anything about grant money being misspent on a police officer.

However, he described his relationship with then Police Chief Bill Silvers as poor. He said he could do little to remedy the communication problems because Silvers had filed grievances against him.

Although unhappy with the audit findings, Olson said they're not entirely unexpected. For years, he said he wasn't given straight answers about the city's budget, and he's glad that the auditor's office conducted a more detailed investigation.

"The audit speaks for itself," Olson said, noting that the mayor is charged with overseeing employees. "It's time to bring this stuff out in the open and get on with it."

One example of unapproved spending occurred on Jan. 31, 2006, when the city terminated its employment contract with attorney Phil Lamb. Lemon, Olson and Councilman David Butler said they always thought Lamb had quit.

Normally, the mayor has the power to hire and fire employees. But with contract workers, approval must first be granted by a majority of the council.

In this case, Butler, Olson and Lemon said they never knew about, nor authorized, Reeves' decision to fire Lamb and give him a severance package of about $28,000. Reeves, though, said he followed the council's directive.

Reeves said the council controls the city's finances, not the mayor. He said the new treasurer may not have been able to provide all the documents the auditor had requested -- which could have contributed to the latest findings.

And as far as Lemon blaming him for the city's financial problems, he's not surprised.

"I know Jim is biased against me," he said. "He doesn't have a clue what he's doing, and he's trying to make others look bad."

* Erin Snelgrove can be reached at 577-7684 or esnelgrove@yakimaherald.com.

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