Board mixed on fair forensic audit request

COEUR d'ALENE — It remains unclear why Kootenai County Clerk Jim Brannon wants the commissioners to authorize a forensic audit of the county fair’s finances and operations.

Brannon, who is attending a clerks conference in Kellogg this week, was not present Tuesday when the matter came up on a commissioners’ meeting agenda, just days before the start of the North Idaho State Fair.

Discussion of the subject was postponed until after the fair.

Brannon's request for a deeper look at the fair's operations comes on the heels of an internal audit performed by the clerk’s office earlier this year that raised concerns about how money is being handled by fair staff, but no one has said anything criminal has occurred.

The clerk did not respond Thursday to several phone and email messages The Press left for him throughout the day.

Forensic audits are generally performed to ferret out fraud or identify weaknesses that would make it easier for fraud to occur. They are usually completed for use as evidence in court.

“The audit the county did was a processes audit, not really a financial audit,” Commissioner David Stewart said. “Forensic is full economics — dollars and cents, acquisition and disposition of funds.”

An informal survey of the three county commissioners on Thursday revealed that, based on the information they have at hand, a vote wouldn’t trigger appropriating funds for a forensic audit.

Stewart is supportive of an audit, while Commissioners Dan Green and Marc Eberlein don’t believe one is necessary. It would be the first time a forensic audit would be performed in the county in at least five years if it is approved.

Stewart, the board’s liaison to the fair, said commissioners aren’t picking on the fair, but when an elected official such as Brannon requests a forensic audit that carries weight.

“When the clerk recommends action, that needs to be taken seriously,” he said. “Out of respect for Jim Brannon as an elected official, I would appropriate the funds (for a forensic audit). And when it’s done, if nothing else, maybe it will settle all the rumors. We’re not the bad guy, but it causes us to take action.

“I’m just trying to keep the train on the tracks to make sure the fair is operating lawfully.”

Stewart said he doesn’t suspect there is criminal activity, but a forensic audit would still be money well-spent because government needs to have checks and balances.

It’s not just the results of the internal audit that cause Stewart to believe a further review is warranted. He said ADA compliance issues at the fairgrounds haven’t been addressed as the commissioners requested, and last year they became aware that an area of the fairgrounds had been converted into a bar without proper permits.

“The fire marshal came to us upset because he had warned them to fix it,” Stewart said. “That’s when we took action and said to change it back to the way it used to be so we don’t have to spend a quarter of a million dollars to bring it up to code.”

But Green and Eberlein said they don’t believe a deeper audit is necessary.

“Nothing that was shown to me says the intent of fraud or illegal activity,” Green said. “The earlier audit said sloppy accounting. That’s a long way from requiring a forensic audit.”

Eberlein said it would be better if internal recommendations could be made to tighten the fair’s finances — without spending money on a forensic audit. The fair has had growing pains over the years, he said, going from a single annual event to functioning more as a business with year-round operations.

It is unclear how the discussion of a possible forensic audit wound up on Tuesday’s agenda.

Green and Eberlein said they thought Stewart put it on the agenda, but Stewart said he was on vacation and didn’t place it there.

“The only thing that I said was that I think we need to have a (future) discussion about this,” said Stewart, adding he didn’t request a specific date.

Eberlein said no one wants to spoil the spirit of the fair, especially with it being around the corner.

"The fair is precious and something that a lot of folks in Kootenai County really look forward to," he said. "I think it's great that people become more aware of their agrarian roots."