Poor Accounting, Disregard for Policies Led to Arts Budget Shortfall

Poor Accounting, Disregard for Policies Led to Arts Budget Shortfall

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Shelley Osterloh reportingAuditors blame poor accounting and a disregard of financial policies for a 1.2 million dollar shortfall in Salt Lake County's Fine Arts Division budget.

Auditors say it was incompetence and a disregard for county policies and basic accounting principles that led to the problems. The two people believed responsible no longer work in county government.

Auditors say for at least the last 3 and half years, money to operate the county's four arts facilities was poorly managed. -- That's money for the Capitol and Rose Wagner Theaters... the Art Center and Abravanel Hall.

An employee blew the whistle six months ago, and a county audit and internal review by the Mayor's office uncovered many problems including:

  1. accounting errors
  2. double reporting of revenue
  3. two outside checking accounts set up without notifying the treasurers office
  4. checks up 25-thousand dollars, written to county employees who cashed them to pay promoters.
  5. Some employees paid out of petty cash instead of payroll, so taxes weren't taken out.
  6. and inadequate oversight. Marian Iwasaki, who led the Fine Arts Division for seven years, was forced to retire. But the county Auditors office says it was fiscal manager, Carole Martin-Mahoney, who regularly disregarded county policies, sidestepped payroll laws and tried to cover mistakes with more accounting errors. Jim Wightman, Dir. Internal Audit, County Auditors Office: "WE CHARACTERIZE IT AS AN ATMOSPHERE OF ETHICAL AND MORAL AMBIGUITY REALLY PEOPLE HAD NOT GRIP ON WHAT WAS THE RIGHT THING TO DO. " Martin-Mahoney was fired last month but is appealing. Wightman says no money appears to be missing, but the investigation continues to turn up discrepancies and mistakes. Salt Lake County Mayor Nancy Workman says now that the problems have been uncovered and new policies are place.. its time to move forward. Nancy Workman, Mayor Salt Lake County: "WE'RE LOOKING FOR A NEW DIRECTOR, WITH SOME VISION ABOUT WHERE THE ARTS CAN GO AND WHAT GREAT AND EXCITING THINGS WE CAN FOCUS ON NOW" Martin- Mahoney has made no public comment on the case, but again, is appealing her termination. The County will make up the 1.2 million dollar shortfall by taking 800-thousand from an account intended for tourism, recreation and conventions. The remaining 400-thousand dollars will be cut from the Current Fine Arts budget--- that's money to operate the Rose Wagner and Capitol Theatres --- the Arts Center and the Abravanell Hall.

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