More information has been released regarding the scope of a forensic audit being performed by Sage Forensic Accounting, who was contracted by the Cache County Council for the job.
Obtained by The Herald Journal in a Government Records Access and Management Act request, a redacted version of the scope of the audit dated Aug. 22 from Sage said the company attended a July 26 closed-door executive session with the council prior to a regular council meeting that day. On the meeting’s agenda, a portion of state code read: “discussion of the character, professional competence, or physical or mental health of an individual.”
Sage’s scope document says “various concerns were explained to Sage and discussed amongst the Council. Thereafter, Sage understands the Council engaged the services of Lee | Nielsen to offer legal opinions on specific issues that relate to some of the Council’s concerns.”
In the council meeting following the session, Council Chair Paul Borup made a motion “that the council retain Sage Forensic Accounting to develop the scope of the audit and provide technical assistance and analysis regarding the county’s current internal controls.”
Each council member voted for the motion with the exception of Karl Ward.
“I just can’t grasp, get my head around this whole thing,” Ward said at the time.
It was also determined once the scope of the forensic audit was established, the council would again need to vote to approve it before the actual audit would begin.
Though an independent, county-wide audit had recently been completed at the time, Worthen told The Herald Journal the council’s forensic audit would explore areas the previous audit had not mentioned.
“We feel like there’s some red flags pertaining to our internal controls in financial issues,” she told The Herald Journal at the time.
County records show $40,000 was moved from a federal coronavirus relief grant to the council’s professional and technical budget to pay for the contracted audit on May 10.
Though the year has seen multiple turbulent disagreements and discussions between elected county officials and the council, the specifics of the scope, as well as Worthen’s “red flags,” remain publicly unknown.
On Sept. 5, Borup emailed all council members with the scope Sage provided, as well as an analysis from Lee-Nielsen law firm on whether county code is in check with state code “in the financial matter of intra and inter-departmental transfers.” These were also obtained in a GRAMA request regarding the scope of the audit.
Though Lee-Nielsen’s analysis has not been made public, Borup said all transfers between departments over $1,000 need to have council approval and mentioned that some transfers that should have been approved by the council never were.
“I’m hopeful we can vote on the scope of the audit at the next meeting in the same way we vote on property tax adjustments. The Council will have access to all of the information but it won’t be made public at this point,” Borup wrote. “We can discuss in generalities but it is best if the specifics aren’t publicized at this point to maintain audit integrity. We will of course make all the documents public when the audit is completed.”
He included a paragraph from of Sage shareholder Daniel Rondeau that also emphasized the need for confidentiality.
“John Luthy has expressed his disapproval with this process to me on multiple occasions,” Borup said.
He also said County Attorney John Luthy wasn’t in agreement that the council should contract outside legal assistance, as they had with Lee-Nielsen. While Luthy recognized the council’s ability to obtain legal assistance as dictated in the state code, Borup said, he believed the code meant councils can hire attorneys in-house.
During the Sept. 13 council meeting, Borup’s hopes were realized when the council voted to approve the scope of the audit.
Each council member present voted to adopt the scope and continue the audit except Council Member Gordon Zilles and Council Member Ward, who was absent but asked Council Chair Barbara Tidwell to deliver the message that he was opposed.
Borup was also absent from the meeting.
Zilles expressed a desire to further discuss the scope and need for the audit in the meeting, but Worthen — who made the motion to “approve the scope of the forensic audit as was presented in email” — cautioned against it.
“It just needs to remain, at this point, confidential,” she said.
In the redacted version of Sage’s scope, the four pages that would likely detail Sage’s investigation plans are blank.
It does state, “Sage assumes no responsibility for failing to identify any improprieties that may be occurring. In that regard, Sage notes that fraud can be committed even when investigative audits are conducted.”
It also says, “In performance of this assignment Sage will not audit, compile, or review County’s financial statements, and Sage will not express an opinion or any form of assurance on them. This engagement cannot be relied on to disclose all errors, irregularities, or illegal acts, including fraud or defalcations, that may exist.”
Sage’s hourly rates, as of the Aug. 22 document, were listed as $50-100 for paraprofessionals, $75-125 for professional staff, $100-175 for senior staff, $150-240 for managers, and $250-450 for shareholders.
Luthy said the redacted parts of the scope are protected records through state code, which limits accessibility to audits when public knowledge of the documents could interfere with the process.
Cache County Clerk/Auditor Jess Bradfield said he does not look favorably on the audit or how it is being performed.
“If the scoreboard of government is based on results, the only outcome I see coming from this situation is a metaphorical safety,” he said.