Following the (lack of) money

By BRIAN WALKER

Staff Writer

SPIRIT LAKE — The city of Spirit Lake is seeking answers about why its finances aren't adding up.

Mayor Renee Eastman said she plans to have the City Council consider a contract with Eide Bailly of Spokane at its meeting on March 12 to perform a forensic audit on the city's finances.

"There are funds not accounted for," she said. "There are just questions that need to be answered for everyone. We need to find out where the discrepancies are to make sure the city is functioning correctly."

Eastman said, in the sewer account alone, there is an estimated $500,000 to $600,000 that appears to be unaccounted for over several years before she was elected in 2017.

"There are also a few other discrepancies that have been found," she said.

Eastman said it is too early to point fingers at anyone or even deem there was criminal activity.

"The funds may have just been used for maintenance and operations versus what the funds were designated for," she said.

Eastman said suspicions surfaced before she was elected mayor in November 2017.

"Some people in town were asking about it, and that's part of the reason I ran," she said.

Finding answers on the city's financial picture has been a priority ever since, Eastman said.

The city last year tapped Romney Financial Forensics of Spokane to perform a forensic audit, but that work never materialized because the firm couldn't get to it with other audit projects.

"After four or five months, they informed us that they couldn't get away from another audit," Eastman said. "(Lenore Romney) spent some time here gathering documentation, but they ended up not charging us anything."

Eastman said turnover with city staff and the City Council late last year also delayed the pursuit of a forensic audit until now.

Eastman said that, whatever auditing firm is chosen, their employees can't know anyone at the city, in order to conflicts of interest. She said another auditing firm was ruled out for that reason.

Eastman said a cost proposal from Eide Bailly on the forensic audit hadn't been received as of Tuesday.

"We don't want to break the city's finances, but we still want to answer questions about what happened," she said.

Eastman said having city staff do some legwork preparing for the audit to save on costs while still shepherding the city's day-to-day operations has been a challenge, but an important one.

She said, to her knowledge, the city has never had a forensic audit performed.