State auditors have highlighted "significant oversight concerns" about a $440,000 TV production truck bought by a Dixie State College-run TV production agency that has seen one employee charged with fraud.
The Community Education Channel Agency, formed by the college and local governments, broadcast only a dozen educational events in southern Utah with the truck. It instead leased the vehicle back to its original owner and others, who used it for out-of-state sports coverage, according to a Legislative audit released Wednesday.
A former CECA employee is facing theft and fraud charges for allegedly submitting false invoices and re-selling equipment to the agency for a "significant markup," according to charging documents.
State auditors say the problems point to a need for clearer laws and tighter oversight on inter-local bodies such as CECA and UTOPIA, a multi-city public-sector broadband Internet network in northern Utah mired in $120 million of debt.
"Specifically, it's not always clear what rules and policies these organizations should follow," according to the audit.
But Dixie State College Dean William Christensen disagreed in a written statement, saying CECA's problems were the fault of "a few individuals" who "willfully violated directions and procedures that were clearly stated and already in place."
Denying there was any similarity to UTOPIA, Christensen said there is no need for new regulations. Audit supervisor Kade Minchey did give Dixie State credit Wednesday at his presentation to the Audit Subcommittee of the Legislative Management Committee.
"They've done a lot of things to clean this problem up," he said, including the resignation of the former head of the agency.
The CECA was formed in the mid-1990s to broadcast local events and give students broadcast experience. It has members from five Southern Utah cities, as well as from Washington County, the county's school district and Dixie State. Its approximately $300,000-a-year budget comes from cable company Baja Communications through the city of St. George, as well as revenue from various cities in Washington County, according to Christensen.
The CECA investigation started when a businessman complained to legislators that the publicly-owned truck was being leased to private companies at $4,667 a month, a much lower rate than he was able to offer.
"Government was paying for his business to go under," said Senate President Mike Waddoups, R-Taylorsville, Wednesday.
The truck has since been sold for $191,250, not including the semi tractor used to pull the truck.
"The loan taken out to purchase the truck ... will leave the CECA with ongoing debt that could hamper the organization for some time," according to the audit.
Auditors found the 2009 purchase was not well-documented the bill of sale was signed only by the director of CECA and it was immediately leased to the Washington state-based previous owner without a formal bid process.
Another internal Dixie State investigation found other problems at CECA, including issues involving former employee Michael Durrant, 30, who was charged in June with second-degree-felony communications fraud and theft, a third-degree felony. He pleaded not guilty earlier this month.
The audit subcommittee voted Wednesday to pass the audit on to business and education standing committees.