BOCC to include fairgrounds in FY’23 financial audit

By Zach Hagadone
Reader Staff

Following months of raucous, often explosive meetings, the Bonner County board of commissioners enjoyed a relatively even-toned morning Dec. 12, even as it addressed a number of hot-button issues including meeting protocol, the legitimacy of the so-called Individual County Constitutional Officers and auditing of the Bonner County Fairgrounds.

Chair Luke Omodt began the regular Tuesday business meeting by addressing the manner in which the agenda would be followed, with Robert’s Rules of Order providing a “framework” and public comment being placed near the end of the meeting — after the agendized items and before commissioners’ reports.

Omodt reminded members of the public to “debate issues, not personalities,” and reiterated a number of sections of Idaho Code and county ordinance underscoring the prerogative of the chair to recognize speakers and direct them to keep their comments focused on the agenda.   

“The board will not engage in dialogue with the presenter during discussion,” he said, noting that county business meetings do not constitute public hearings.

Commissioner Asia Williams was absent from the Dec. 12 meeting.

Bonner County Commissioners Luke Omodt, left; Asia Williams, center; and Steve Bradshaw, right. Photo by Lyndsie Kiebert-Carey.

The BOCC approved bills and the annual financial report of the Department of Juvenile Corrections, as well as the final plat for the 19.5-acre Fisher Haven Estates development, and transferred more than $574,000 from the capital construction general fund and EMS capital construction funds from the Fiscal Year 2024 budget to the FY’23 budget to correct for an overestimated carryover.

Finally, commissioners approved the closeout of a $25,000 grant for improved parking at the Gold Hill trailhead, with funds to be reimbursed by the U.S. Forest Service.

The BOCC ran through those parts of the agenda with little disruption, Omodt only having to remind a handful of public speakers to stay on topic as their comments strayed into what the chair determined to be irrelevance.

The biggest-ticket item came with discussion of the Individual County Constitutional Officers and the drafting of a letter to Moscow-based accounting firm Hayden Ross, which had performed auditing services for the county from FY’13 to FY’22, reflecting that while previous county audited financial statements have not included Bonner County Fairgrounds operations, that information will be included in the FY’23 statement “as a component unit of Bonner County,” though examined by a different independent auditor.

Omodt led off that portion of the agenda with a recounting of the origin of the ICCO, the formation of which Bonner County Sheriff Darryl Wheeler announced in May 2022 as an audit committee dedicated to reviewing and helping guide how the county would (or wouldn’t) spend federal American Rescue Plan Act funds.

In an email to then-Commissioners Dan McDonald, Jeff Connolly and Steve Bradshaw in May 2022, Wheeler wrote that the ICCO had also chartered a three-member audit subcommittee of which he would serve as chair and, “Although the BOCC isn’t a necessary signatory to this Charter, the Bonner ICCOs would appreciate the BOCC joining this project with us.”

Omodt argued that the ICCO has no statutory authority to operate as an auditing body, citing Idaho Code that the auditing of county finances is to be conducted “under the direction of the board of county commissioners.”

“It is not the powers and duties of the sheriff, it is not the powers and duties of the county clerk, it is not the powers and duties of the treasurer,” Omodt said. 

“Somehow the ICCO came up with this idea that they had authority to create an audit committee,” he later added, going on to describe the evidence offered by Wheeler for the group’s authority as a “long, convoluted exercise in overreach.”

In May 2022, Wheeler cited the court case Allied Bail Bonds, Inc. v. County of Kootenai in arguing that elected county officials hold “independent constitutional authority” over their respective offices, and such authority “does not derive” from the board of county commissioners.

Based on that independent power, Wheeler told the BOCC last May that the ICCO would review COVID-era ARPA monies under Section 303 of the Code of Federal Regulations, which deals with the ways that non-federal entities are to handle federal awards. Lacking a specific 303 program at the county, Wheeler said the ICCO could fill that role and hoped that the group would come together with the BOCC to “agree on a common 303 framework enabling the spending of ARPA funds.”

During his commissioner report at the end of the public meeting Dec. 12, Omodt said, “The ICCO created itself out of wholecloth” and proceeded to “operate in clandestine meetings,” which he contended runs afoul of Idaho Open Meeting Law. According to the open meeting law manual, meetings held by “a governing body of a public agency shall be open to the public,” with a “governing body” defined as “members of any public agency ‘with the authority to make decisions for or recommendations to a public agency regarding any matter.’” 

He noted that only one elected member of the BOCC is a member of the ICCO: Commissioner Williams, who joined its subcommittee to formulate the 303 framework as a commissioner-elect.

Bonner County Sheriff Daryl Wheeler. File Photo.

In a Nov. 28, 2023 email from Wheeler to Omodt, in which the sheriff supplied a memo intended to “provide a basic argument supporting the legitimacy of the ICCO,” it was stated, in part, that “[t]he activities of the ICCO do not detract from the BOCC’s responsibilities; rather, they bolster the county’s capability to meet these federal requirements, thus fostering a more robust and efficient control environment.” 

In addition, Wheeler wrote, “The BOCC’s refusal to consider input from these separate constitutional officers risks creating an information vacuum in the oversight process,” going on to specifically cite “the BOCC’s monitoring failures, especially concerning the Fair Board’s cash operations.” 

“Instead of facilitating open and thorough monitoring processes, the BOCC appears to be actively blocking input regarding these monitoring activities,” the memo stated.

Underpinning Omodt’s discussion of the ICCO was the repeated assertion that the authority to audit county dollars falls to the direction of the commissioners, and that the audited financial statement for FY’23 will  include the fairgrounds, though either “blended” or “discreet” with the overall statement, and conducted by an independent auditor, which will be identified following a request for proposal. Also, the audited statement would not extend to previous years’ fairgrounds records.

Based on an ongoing audit of the Kootenai County Fair by another firm, Omodt estimated that it would cost between $20,000 and $25,000 to audit the fairgrounds, in addition to the $50,000-$100,000 spent looking through Bonner County’s books as a whole. 

Some in the community have called for a 10-year review of the fairgrounds’ financials, especially in the wake of the alleged fraud committed under the tenure of late-Fair Director Darcey Smith, who apparently took her own life in October 2022 amid the onset of a probe into suspected misuse of funds. Omodt estimated that doing so could cost between $200,000 and $250,000 “to make a determination of what, I do not know.”

He reiterated that the fairgrounds’ financial records going back several years are incomplete at best and in some cases missing entirely, which would make the exercise of a long-ranging audit even more complex.

“Two hundred and fifty-thousand dollars, looking backwards, is money that this commissioner at this time is not prepared to spend with this information that we have before us,” Omodt said.  

Those who testified on the audit at the Dec. 12 meeting were in favor of looking beyond FY’23 fairgrounds records.

Resident Kristina Nicholas Anderson said that it was “premature” to assume the county couldn’t afford a larger retroactive audit of fairgrounds financials, and, “things can’t really heal and move forward until we rectify what has happened in the past and I don’t think 2023 is that starting point.”

Resident Dan Welle similarly testified, saying, “Failing to look into the past is going to prevent you from going forward.”

“Nobody in this county is going to be satisfied until this is dealt with explicitly, so they know the details around it,” he added. “You can’t do an audit? Wrong. A forensic auditor can go into the bank statements … they can make connections, they can end the problems that are going on here. … Until that happens, you’re going to continue to have division and dissension.”

Clarification: Due to a misinterpreted statement, a previous version of this story incorrectly reported  that accounting firm Hayden Ross would be preparing Bonner County’s audited financial statement for fiscal year 2023. While Hayden Ross conducted that work from FY’13-FY’22, the county has not identified an independent auditor for FY’23, though has advertised for one. We have altered this report to accurately reflect that and regret the error.