Home Government County County council repeals code of conduct in response to audit

County council repeals code of conduct in response to audit

46
0

In a Nov. 1 letter, the Utah State Auditor’s Office advised Morgan County that it had an insufficient conflict of interest disclosure process, inadequate separation of duties over cash accounts and disbursements, untimely or inaccurate reconciliations of significant accounts, lack of approval of council member expenditures by the county attorney, and insufficient documentation for payment of mileage and per diem.
The Morgan County Council is already taking measures to correct these audit findings, most recently at their Nov. 21 meeting when the council unanimously voted to repeal their Morgan County Employee Code of Conduct. In its absence, the county will now hold employees to meet the requirements of state code, specifically requirements of the County Officers and Employees Disclosure Act.
The former county code of conduct required county council members to verbally disclose conflicts of interest “to the public, abstain from voting on the matter, not participate in any deliberations on the matter” and “leave any room or chamber in which such deliberations are to take place.”
The Office of the State Auditor said a verbal declaration is not enough, and would like Morgan County to require an annual written disclosure of conflicts of interest as well, as called for in state code.
“We recommend that the County modify its practices to comply with the requirements of the County Officers and Employees Disclosure Act by requiring council members to provide the appropriate disclosure of potential or actual conflicts of interest,” according to the letter. “We also recommend the county clarify its policies related to disclosure of conflicts of interest.”
“At the first of each year, each council member should declare any business holdings and conflicts of interest,” Morgan County Attorney Jann Farris said. “I can put it on the agenda at the first of each year.”
Although state code requires verbal and written disclosures, “it does not necessarily prohibit council members from participating in discussions or votes related to areas where conflict occurs,” the letter read. “Conversely, the county’s employee Code of Conduct, from which the council derives its current practices for disclosure of conflicts of interest, may be unenforceable as it is simultaneously vague and all-inclusive. For example, the policy defines conflicts of interest in such broad terms that ever council member could have a perceived conflict of interest on every issue. The Employee Code of Conduct also provides no details about how and when to disclose conflicts.”
Morgan’s employee code of conduct was drafted by Kelly Wright, former county attorney, after two recall elections of county council members in 2004.
The code of ethics, a resolution found in the policies and procedures manual, defined a conflict of interest as “a real or perceived incompatibility between one’s private interests and one’s public or fiduciary duties. It occurs when a person’s private or business interests and concerns conflict with his or her public loyalty and fiduciary duties. The private benefit may be direct or indirect, create a material personal gain, or provide an advantage to relations, friends, groups, or associations that hold a significant share of the official’s loyalty.” The resolution advises all county officials, employees and representatives to avoid “even the appearance of conflicts” as determined by an “objective reasonable person standard.”
“If there appears to be a conflict, there is a conflict. That was our (old) ordinance,” said Farris, who noted the former ordinance has been seen by the state attorney general as “being too hypersensitive.”
“Leaving ours the way it is, is unenforceable,” Councilman Robert Kilmer said.
Farris said that a recent internet search for other counties’ code of ethics turned up nothing. “We must be the odd ball out there,” Farris said.
The state code known as the County Officers and Employees Disclosure Act was enacted in 1983. “Every appointed or elected officer who is an officer, director, agent, or employee or the owner of a substantial interest in any business entity which is subject to the regulation of the county in which the officer is an elected or appointed officer shall disclose the position held and the precise nature and value of the officer’s interest upon first becoming appointed or elected, and again during January of each year thereafter during which the officer continues to be an appointed or elected officer,” according to the state code. “The disclosure shall be made in a sworn statement filed with the county legislative body.” The same applies to any employee who anticipates doing business with the county.
The state audit report on Morgan’s internal controls covered the period from July 1, 2015, to June 30, 2017. The Office of the State Auditor interviewed employees, department heads and elected officials; examined documentation to support payments and verify authorization; and reviewed all policies and procedures related to finances. “By its nature, this report focuses on exceptions, weaknesses, and problems,” reads the letter, which lists Local Government Manager Jeremy Walker as a contact.
The audit letter said an inadequate separation of duties over cash accounts and disbursements “could allow errors and fraud to occur without detection.” However, the letter also noted that such a separation of duties can be “impractical” due to the small number of county employees. In such cases, internal control procedures should be beefed up and compensating controls implemented, it recommended.
Morgan County was allowed time to prepare their responses to audit findings before the Office of the State Auditor made them public. The county’s Oct. 27 response was signed by four county council members, but not by Councilmembers Daryl Ballantyne, John Barber or Tina Cannon.
The county has already made the move to mitigate the audit finding, hiring Chuck Ulrich, an outside accounting firm, to help the county clerk auditor review adjustment lists and bank statements each month. The same firm is helping complete the county’s reconciliation process each month.
Morgan County has also taken steps to develop a travel reimbursement request form, which will be used to provide proper supporting documentation for employee reimbursements for mileage, per diem and other travel expenses.

Please follow and like us:

LEAVE A REPLY

Please enter your comment!
Please enter your name here