BOCC approves external audit of fairgrounds

Fair Board and commissioners work toward a plan to regulate future finances

By Soncirey Mitchell
Reader Staff

Bonner County commissioners voted to hire an external auditor for the fairgrounds at their regular business meeting Oct. 24, in a motion proposed by Commissioner Asia Williams, though as of press time the board did not yet know the scope of the audit, nor had it chosen a specific auditor.

“As we move forward with having to repair what has happened at the fair, [we need to] ensure that we put in some internal controls to maintain the solvency of the fair and the trust of the community as we hand money over to the fair. This is absolutely necessary,” said Williams. 

She further recommended that the board request bids for the job from at least three different firms; however, she said, all potential auditors currently have a six-month waiting list.

The audit will not specifically focus on the issue of suspected fairgrounds fraud, which an independent investigative report released by the Bonner County Sheriff’s Office in July alleged had been perpetrated by late-Fairgrounds Director Darcey Smith from approximately 2018 to 2022. 

At the request of former-Bonner County Republican Central Committee Treasurer Spencer Hutchings, Commission Chair Luke Omodt will compile a list of the fairgrounds’ average income for the past five to 10 years and present it during the BOCC’s regular meeting on Tuesday, Oct. 31, so that the public can better understand the alleged fraud.

County Clerk Mike Rosedale testified to his overwhelming support of the motion to hire an external auditor.

“Every year, we do audit the Fair Board’s funds as it relates to those that we levy and those we spend on salary and benefits, but we can’t see and never have audited their operating,” he said. “I think this is a fantastic thing.” 

According to Rosedale, comprehensive auditing has been an “impossibility” until now because the fairgrounds has bank accounts that the county treasurer doesn’t have access to.

“We need to get those back under our county treasurer and the invoices, collections, receipts and revenue need to run under the county clerk,” he said, adding, “I think it’s going to be blue sky from here on out.” 

The Fair Board also appointed its own treasurer, which the body has never had before, according to Commissioner Steve Bradshaw.

The commissioners and the Fair Board have met privately with their respective legal counsels and each other over the past two weeks to decide how to proceed with the fairgrounds’ finances. Because of this, Omodt, who seconded William’s motion, expressed some concerns over the scope of her proposed audit.

“I’m hoping that we’re discussing a fiscal year ’23 audit and we’re not discussing a 10-year forensic audit, because my understanding from the conversations last week and today, we’re seeking to try to get a fiscal year ’23 audit so that that can be attached to the county’s audit,” he said, referring to previous meetings with legal counsel.

Though the board does need to complete an audit of the fairgrounds’ current finances, Williams maintained that the auditor will need to go back further to identify any holes in the Fair Board’s financial practices that might have allowed for the alleged fraud. That way, they’ll be better equipped to prevent any potential future misappropriation of funds. 

Rosedale agreed that the external auditor is the only one qualified to outline the scope of the audit.

“They’re the pros. They know what they need to do and what we don’t want to do is handcuff them and we don’t want to stifle them,” he said. 

Both Rosedale and Williams agreed with legal counsel that the county should seek an external auditor to assure the public that there are no conflicts of interest.

“This is a unique situation with a lot of politics involved, with a lot of emotions involved, and we need to make sure that what we’re paying for as a community is addressing all the concerns that members of the community have,” said Williams.

Bradshaw supported the audit, and explained that regulating the fairgrounds is difficult because the Fair Board has a unique amount of autonomy — for example, it can enter into contracts without permission from the commissioners.

“There’s two sets of laws for county fairs — how fun is that — based on the population of the county,” said Bradshaw. “One set of rules fits these counties, one set of rules fits these counties, and so when [attorney Bill Wilson] dug that up, it’s like, ‘Hey guys, Bonner County Fair has always done it wrong. The county has always done it wrong. We’ve got to fix it.’”

Neither Wilson nor Bradshaw responded to requests for clarification by press time, and Wiliams declined to comment but forwarded the questions to Prosecutor Louis Marshall. 

In an Oct. 25 email, Omodt told the Reader that he did not completely agree with Bradshaw’s claim.

“Bonner County was not using the wrong laws. Much of the advice given by legal counsel over the last two years has been completely reversed based upon the research conducted by two legal firms — Malek and Smith and Witherspoon, Brajcich, and McPhee — and the accounting firm of Eide Bailey,” he wrote, clarifying that Bradshaw’s comment was specifically referring to Idaho Code 22-202A.

He did not detail the differing legal opinions on I.C. 22-202A, which outlines that, in counties with at least 200,000 residents, the Fair Board can “function as an advisory board” and “conduct its operations” as stipulated by an ordinance from the commissioners. The 2020 census placed Bonner County’s population at approximately 47,110, so this law does not apply.

Regardless of the previous hurdles, the commissioners were optimistic that the audit will get the fairgrounds’ finances under control and help the community heal from the loss of Darcey Smith.

“No matter what happens about the Fair Board — with money or finances or paper — nothing will change the loss of life that a lot of people feel to the core of their being,” said Williams. 

The commissioners passed the motion to audit unanimously.

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