Wednesday, December 8, 2010

Ketchum’s accountant reprimanded

Questions still linger over unaccounted-for affordable housing money

Express Staff Writer

Accountant Dennis Brown continues to audit the annual finances of Ketchum's city government and urban renewal agency despite the fact that the Idaho State Board of Accountancy ruled this fall that he didn't properly audit Ketchum's finances last year.

Brown appeared before the council Monday night to report his audit of the 2009-10 fiscal year for both the URA and the city. He said last year's error was merely failing to properly document his work, and the board found his end product, the audit, to be accurate.

Board Executive Director Barbara Porter said in an interview that Brown's failure to document his process is a "very small" matter because it didn't result in dollar-amount mistakes.

"The audit would not have had a different result if it had been documented adequately," the board's report stated.

However, the board has "reprimanded" Brown, fining him $1,000 and charging him $2,000 in attorney fees. The board also required that the next audit he does for Ketchum or URA be reviewed by another accountant at his expense, not the city's, and be submitted to the board before it is given to Ketchum.

Porter said Brown has had another accountant double-check his work, and the board is currently reviewing Brown's audit and the independent accountant's review.


The board was looking over Brown's work in the first place because of a complaint filed by former Ketchum resident and certified public accountant Jim Donoval. Donoval's complaint centered on $1.46 million that the city transferred to the URA three years ago from its account restricted to use for affordable housing. Donoval's concern arose from Brown's failure to show in the URA's annual finances since then that any money was reserved for affordable housing.

The money was transferred to the URA to help buy vacant property at the corner of First Street and Washington Avenue and the building on Sun Valley Road now serving as the visitors center. Donoval and several other residents have repeatedly asserted that since the money is "restricted" for affordable housing, the URA should repay any amount spent for other purposes. It's difficult to claim that the visitors center is affordable housing, but the vacant Washington Avenue lot—whose purchase required $750,000 in affordable-housing money—could someday be used to build affordable housing.

If that logic is followed, $714,000 in affordable-housing funds remains unaccounted for in the URA's finances, because nowhere in Brown's past audits did it show that any URA money was restricted for affordable housing.

Porter said the board's investigator looked into all complaints brought forth, but—as previously stated—didn't find any errors in the audit, just missing work documentation. However, Brown included something in this year's audit that he had never done since the city transferred its affordable-housing money to the URA in 2007. He listed money as "restricted" for affordable housing, but it's only $489,171. A question persists as to where this $489,171 amount came from and why the entire restricted affordable-housing amount wasn't stated.

Ketchum resident Phyllis Shafran asked that question of Brown and the URA.

"We've talked about it," she said of past discussions about this "missing" affordable-housing money. "The financial statement is not correct."

Despite the questions, the URA board unanimously approved Brown's audit on Monday and said they'd look into it.

"Rather than speculate, we're going to get the facts," said URA board Chair and Mayor Randy Hall.

Trevon Milliard:

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