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BOISE, Idaho (AP) — State Treasurer Ron Crane has not provided enough evidence that a full review was conducted following inappropriate money transfers that cost taxpayers millions of dollars, according to auditors working for the Idaho Legislature.
In January, auditors found that Crane's office overrode internal controls meant to contain financial risk and made the transfers, which resulted in a loss of at least $10.2 million in taxpayer money.
The latest follow-up audit, released this week, says that while Crane's office says it has reviewed its securities-lending transactions, it has only provided state officials with documentation for two of the transactions. "No additional evidence supporting a full review of all potentially inappropriate reallocations was provided," the report said.
Crane, a four-term treasurer who has been criticized by auditors in the past, has disagreed with the report's findings. He said in January that the auditors were able perform only with "the lens of hindsight."
Crane did not return calls from The Associated Press on Thursday. But his office released a statement saying that while it continues to disagree with the January report's findings, it has taken measures to strengthen internal reviews. The office has since added an investment officer and improved communication between staff, management and the treasurer, according to the statement.
The $10.2 million loss resulted from investments in mortgage-backed securities hit by the collapse of the 2008 housing bubble. In 2009, Crane thought the investments were still worth their face value of about $31 million when he transferred them to the local government fund, according to the audit issued in January. Instead, their real market value was $10.2 million less, according to the audit.
The January audit also called for more oversight of Crane's office, which the new report said has been met by state lawmakers approving the creation of an advisory board during the recent 2014 legislative session. The board will review investments and provide recommendations to Crane.
The report released this week also says state auditors will assess the effectiveness of Crane's office reorganization in a later review.
Deborah Silver, the Democratic Party's candidate against Crane in the general election, criticized what she said is inaction on Crane's part.
"So, exactly who knows what's going on here? Idaho's taxpayers deserve more than meetings. They deserve a treasurer who provides open and transparent accounting," Silver said in a news release. "Mr. Crane has made it clear that he has no intention of being an honest, open manager of the public's tax dollars. Any professional complies with an audit."
Crane is currently running for his fifth term. In 2002 and 2006, he defeated Democratic candidates by winning more than 60 percent of the vote.
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