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Show nrcamsenteslD al - Comm : nity WASATCH PAGE 22 COUNTY TUESDAY | COURIER Audit — eaten tate “ us - sheen ound anes m4 ronan Hicken Takes Some Heat | ladies lenin By Dan STEPHENS PUBLISHER ne Be Yet Ever thought about a cruise around the world? Oi he mead Ca a paw - SALT LAKE CITY - On July 15th the Office of the Legislative Auditor General of the Sate of Utah released a performance audit of the Central Utah Water Conservancy District (the district). The audit was critical of the district aecmrbtrs Aca in three main areas, financial management, policies and tepctrmbeg ht ne. rile aot Seas sell jaws enforcement, as well as casting a shadow on the future of the Spanish Fork-Nephi component of the Central Utah Project (CUP). In the financial policies section the audit found that the district had lost approximately $3.7 million by investing interest bearing checking account yielding only a 3% return. The district contends that federal law mandates that the cash reserve be held in a federally chartered bank in an account on which checks can be drawn. The audit noted that in the five years the district held high balances We can help! NO SERVICE FEE! ‘Come in a the district had not investigated any better investment options. The audit also stated that at the same bank where the money was held, a switch to a $20,000 minimum high see us ae yield checking account would have added an additional 2 percentage points to the total return. The audit noted that th oe ~ Castle Travel— the district had not attempted to negotiate a higher rate of interest in spite of the large dollar balance of the account. Further, the district had not shopped among other banks tte Your Gateway to the World ir 100 S. * Heber City,UT $4032 for competitive interest rates. Interestingly, the federal ancl nce 654-4141 manager responsible for overseeing the district aes said that any additional interest would create an “accounting _ nightmare”. ee ~Since May Ist of this year the district reports that it has agreed with its bank to pay ‘interest at the 90-day —— Treasury Bill Rate. - Another financial policy .. drawing criticism was the district tax rate. According a to the audit the district has — collected $7.2 million dol- . lars more in property taxes — ~ i - and water sales than neces~ sary. As of May 1999 the district was still taxing at he PEECTHPERY: highest possible rate. The Something To Smile About!| alten | snalsilaion olin ALAR AT IL -: in unnecessarily low yield investments. The district had invested its $72.2 million cash reserve in an ordinary General & Cosmetic Dentistry New Patients.& Emergencies © Welcome! scott ASH david MAISEY 783-CARE 54 North Main KAMAS 654-4009 fc 37 West Main * MIDWAY | {noe ae oe oe local irrigation companies. The audit however found these. three board members to be of special concern. The audit states, “Financial dealings with board members beyond payments for actual board duties appear to be conflicts of interest: and quid pro qou serie that amply favoritism.” In district board See han Hicken’ s case $89,295 was - received from a district contract with Wasatch County. The district has contracted with Wasatch County and/or Wasatch County Special Service Area (WCSSA) to coordinate and manage water-related issues in Wasatch County. The primary duty of WCSSA is to provide assis- tance to the district with the Wasatch County Water Efficiency Project (WCWEP). Mr. Hicken has served as chairman of the WCSSA oversight board, as a consultant for WCSSA and as general manager of WCSSA. Mr. Hicken contracts with the WCSSA through his firm, Royal | Solutions. According to the audit, “Funding for this project flows from the district to either the WCSSA or Wasatch County and then in a to Royal Solutions for its managerial consulting services.” The audit indicated that Mr. Hicken, hile | not double billing, had billed both the district and WCSSA for expenses at a single conference. This indicates a blurring of roles between his jobas district sentative of the WCSSA.-At chairman and repre- a water conference in St. George hours were paid by WCSSA for a presentation while the district paid for mileage, lodging and meals. In another instance, hours were billed to WCSSA for delivering a memorandum from Heber City to Orem while the district was. billed for The aut found that the districthadlost approximately— $3.7 million by putting their $72 million fund in. a low-interest checking account. mileage. Hours views with were local _ also media regarding the WCWEP projThe audit says that Mr. -Hicken “has done an inade- __ _ quate job of documenting his - time.” None of the payments from the WCSSA account to Royal checking Solutions included information identi- fying or supporting the billed amounts. However, four bills presented to the county in 1997 were minimally documented. In 1998 only one of Royal Solutions’ monthly audit noted that at the curinvoices included supporting | rent rate of over taxation the official told the auditors County information. A Wasatch district would accumulate $81 million in_excess taxes: by that. documentation be avail, no to that “they have aS the year 2011. The audit noted that “district fund balances, sent with invoices.’ _expected expenditures, and expected tax and water sale The audit noted that the contract between the district | revenues do not appear to have received priority treatment and Wasatch County required that district participation be by the district’s manager or board.” The audit also stated limited to a 50 percent match for contracts dated through that the district’s general fund balance appeared exces1997. In spite of the contractual agreement, Wasatch sive, having risen by 30 percent since 1995 for no specif- County, through a request signed by a county commisic purpose. In notes regarding budget items, the audit sioner and Mr. Hicken acting in his role as Wasatch Water noted that over the last three years the district has paid Board Chairman, asked the district to submit payments in - over $270,000 for -its Washington. D. C. lobbying efforts, - the amount of $6,250 per month in lieu of matching payor over $7,330 per month. ments by the county. No mention was made to auditors In the policies and enforcement section the nist regarding repayment from Wasatch County or why the found that district board members indirectly benefited _ district was allowed to pay more than its share. The audit from district contracts although specifically prohibited by noted that the district would naturally be reluctant to take state statue and district policy. It noted that two district action which might antagonize the district board chairman a board members have received at least $110,000 in beneeven though he was operating in his position as Wasatch fits from district contracts with closely related organizaWater Board Chairman. The audit noted that board memtions even though district management is aware that such ber Roscoe Garrett had a similar situation in Juab County financial relationships are not allowed. The board chairin which he received $19,300 in wages and expenses from man, Claude Hicken, has received $89,295 in consulting. a district contract with the East Juab Water Conservancy fees. A second board member, Roscoe Garrett, has District. ~ received $19,300 for management work. Vice chairman, Auditors noted that the WCSSA’s own financial audiRobert F. Weyher’s company was awarded a $500,000 tors have noted potential control issues. WCSSA’s audicontract to do construction work for a district-funded tors stated concerns regarding related party transactions. project. The audit noted that it is not unusual for water The state audit reports that “Current and past WCSSA boards to have potential conflicts of interest since boards - general managers have been directly involved with other will seek. individuals knowledgeable about water. For water districts and water user organizations. e WCSSA’s | example two district board members are employees of see AUDIT on page 2 re water conservancy districts and three are associated with |