The State Auditor’s office released its review Monday of the embattled Jordanelle Special Service District, investigating allegations of mismanagement and misuse of public funds.
Audit Director Van Christensen says his office began investigating the agency that runs Jordanelle’s sewer and water services after they got numerous complaints about mismanagement. They did not discover outright fraud or corruption, but auditors found that the service district was poorly managed for years and failed to keep required records.
“Their processes were so poor, you wouldn’t be able to identify fraud even if it was occurring,” Christensen says.
The audit questions whether Jordanelle Special Service District officials misused their taxpayer credit cards, since receipts were not documented. It found that the district failed to keep minutes of closed meetings as required by law, and failed to document a land purchase. There were so many missing documents, the report questions whether district officials deliberately tried to impair the audit. Christensen says board members seemed to minimize the significance of some of the issues raised.
“I think the part of the audit that is probably the most scathing is our criticism of the governing body, to say, look you need to pay attention to these issues, because you can’t say that there is no misuse here,” Christensen says.
Stephen Capson served on that board from 2011 to 2014. He insists the district was not trying to obstruct the audit, and has already taken action to improve its policies. He says the district has to be careful about the documents released because of ongoing lawsuits from Jordanelle Reservoir landowners. Banks that loaned the district money to build water and sewer systems accused district officials of malfeasance including deals to get rid of foreclosed land. Capson believes that the audit was done on behalf of the opposing side in those lawsuits.
“I believe that the opposing legal counsel was in fact directing the hotline complaints, and that this audit was actually done at the direction of the opposing legal counsel - using state resources to essentially do discovery for a private lawsuit,” Capson says.
Audit Director Van Christensen says complaints came from many sources and that the audit was independent of the landowners. In fact, the audit reviewed some of the claims and found nothing that would support the landowners’ case for illegal activity or corruption.
