Mistakes, but no criminality, per the forensic audit first draft

Posted 3/4/20

An early draft of the audit into the city of Brighton’s utilities funds shows flaws but no evidence of criminality.

The city released a rough draft of Two Hills Accounting’s report …

This item is available in full to subscribers.

Please log in to continue

Username
Password
Log in

Don't have an ID?


Print subscribers

If you're a print subscriber, but do not yet have an online account, click here to create one.

Non-subscribers

Click here to see your options for becoming a subscriber.

If you made a voluntary contribution in 2020-2021, but do not yet have an online account, click here to create one at no additional charge. VIP Digital Access includes access to all websites and online content.


Our print publications are advertiser supported. For those wishing to access our content online, we have implemented a small charge so we may continue to provide our valued readers and community with unique, high quality local content. Thank you for supporting your local newspaper.

Mistakes, but no criminality, per the forensic audit first draft

Posted

An early draft of the audit into the city of Brighton’s utilities funds shows flaws but no evidence of criminality.

The city released a rough draft of Two Hills Accounting’s report March 4 after eight, long-awaited months since council approved it in July. To date, the audit has cost more than $50,000. Council budgeted more than $61,000 to settle last year’s utilities controversy.

The auditors disputed evidence of fraud, for example, while also addressing problems that both sides agreed to during last year’s debate. In the first of three major sections, the firm writes, “While our test work did not identify unreasonable or unallowable expenditures, we note that a budget that authorizes spending well above amounts needed to fund capital projects, operations and maintenance expenses provides the opportunity for wrongdoing.” 

The section goes into further detail about poor budgeting procedures since 2015, such as a future water treatment plant, the planning for which “had not been completed,” despite being budgeted, the report said. 

Mayor Pro Tem Matt Johnston considered such passages as evidence of former “immoral staff that did this to us,” he said in a Facebook post March 4. Claims about the utilities fund spurred Johnston and others to mount an ultimately successful recall against former Mayor Ken Kreutzer. However, another section presented a fund allocation issue that occurred under former city staff that recall supporters praised, such as former City Manager Philip Rodriguez. Council dismissed Rodriguez in July, citing personnel conflict with city employees.  

The auditors found there was “inconsistent and unreliable” funding for projects and whether that money was for maintenance related or growth-related purposes. Depending on how utilities labels a project, rates are subsequently affected.

When Two Hills compared a rate study based off an earlier capital improvement plan (CIP) versus a rate study based on a CIP that Rodriguez drafted, funding for growth-related projects increased by 145 percent.

Two Hills also explored mishaps in procurement, such as improperly assigning multiple identification numbers to a single vendor. While the practice could have led to the city paying a contractor more times than needed, the audit “did not identify any (transactions) that were erroneously paid,” it said.

The section about procurement applies to other city departments and not just utilities, according to Brighton Finance Director Maria Ostrom.

It’s unlikely that the report’s early release will settle the larger debate. Johnston and allies consider it conclusive. “I am sad to say that many of our worst fears of what was happening with our utilities department over the previous 10 years have now been confirmed,” his Facebook post said.

Jeremy Torgerson, another recall leader, said, “What a complete disgrace. Many of you would think I’d be thrilled with this mess of a report, but I’m actually just really disappointed,” according to a Facebook comment.

Not everyone agrees, however. Councilman Clint Blackhurst said, “We haven’t really received a clear picture of what the audit found. That draft report is definitely not a complete report, not even to the main issues that we had the audit for in the first place.”

Blackhurst encouraged others to wait for the final report, which will include the city’s response that might offer important context. For example, Blackhurst said, staff turnover and natural disasters impacted the utilities department’s financial planning. The final report and Two Hills’ presentation to council is scheduled for the March 17 council meeting.

This article is part of the “Brighton’s Battle” news series. 

Comments

Our Papers

Ad blocker detected

We have noticed you are using an ad blocking plugin in your browser.

The revenue we receive from our advertisers helps make this site possible. We request you whitelist our site.