The Arizona State Board of Accountancy, the agency which oversees financial accounting in the state, has voted to formally investigate the Town of Camp Verde’s former finance director and auditing firm.
Shortly after Town Manager Michael Scannell took the job in October 2007, he reported to the Town Council that he discovered the town’s financial system was in a state of extreme disrepair.
Among other issues, discovered an account that should have had more than a million dollars was actually more than $100,000 in the red.
A review by another auditing firm found a serious lack of internal controls to act as a check on how the town’s money is handled.
Former Town Finance Director Dane Bullard and the way he handled town money was investigated by the Camp Verde Marshal’s Office and the Yavapai County Attorney’s Office, but prosecution was declined.
Bullard was forced out of his job in September 2007.
The town has been working to improve internal controls and to get the town’s finance department back on track, but some members of the Town Council wanted answers about what went wrong.
According to an e-mail sent to Scannell from Ryan Edmonson with the accountancy board, files have been opened on Bullard, Dennis Osuch and his firm, Cronstrom and Osuch, which carried out the required annual audit for Camp Verde for some years.
Councilwoman Norma Garrison, who requested that the town take the issue to the accountancy board in January, said she just wanted to know why years of audits never revealed the serious problems that existed in the town’s finance department.
In January, Town Marshal Dave Smith said that keeping the same auditing firm for years can sometimes lead to a sense of complacency that can create an environment where audits might not inform the town’s leaders of everything they need to know. The state recommends that towns use a different auditor every couple of years or so, Garrison said.
Councilman Bob Kovacovich and former Councilman Ron Smith originally voted against sending the matter before the accountancy board; Smith said that no money was stolen and was afraid an investigation could be seen as a “witch hunt.”
Smith was also afraid an investigation could raise legal issues due to the terms of Bullard’s severance agreement with the town.
Garrison denied it was a witch hunt; she said she just wanted answers.
“I was always told that the audit was our safety net,” Garrison said. “The whole idea behind this is to find out what went wrong … I still just want to get to the bottom of this.”
Mayor Bob Burnside said he wanted to let the accountancy board do its job, and that accountability was extremely important when it comes to the town’s responsibility with the public’s money.
According to Edmonson, the accountancy board will likely review the responses of those being investigated at their Thursday, June 18, meeting.
The investigation could take around nine months to complete, Edmonson wrote, so the board can insure due process has been applied should the investigation end up in front of an administrative law judge.
