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What went so wrong with management at an independent agency overseeing Utah's emergency communications and 911 that it was hit by a $1 million embezzlement that lasted a decade?
Just about everything that could go wrong, according to a state audit released Wednesday.
The report presented to lawmakers gets down into the weeds of internal controls and proper procedures.
But after the meeting, David Pulsipher, performance audit director, put it in simpler terms.
"It was about the ripest environment possible for that [the embezzlement] to happen," he said in an interview.
Among the lapses at the Utah Communications Authority (UCA) were the failure to match receipts with expenses on agency credit cards, sloppy review of credit-card statements that turned out to be forged and failure to enforce spending limits. The audit also found fault with the size of the board: 27 members more than the agency payroll of 24 employees.
"The board consists of more than twice the number of members of any other independent state entity, convoluting board oversight," the audit said.
The embezzlement has been blamed on Patricia Nelson, former administrative assistant to a UCA director Steven Proctor, and Nelson's daughter, Crystal Evans. The two signed judgment by confession documents in a civil lawsuit brought by the agency in March. They agreed to a $2.3 million judgment, including interest and punitive damages.
Among illicit spending noted in the audit was $8,000 at state liquor stores, $21,000 in restaurants, $361,000 on retail purchases, $167,000 in PayPal charges (including a $6,000 Bahamas vacation) and $44,000 on home improvements.
Quinton Stephens, a UCA attorney, told lawmakers Wednesday that the pair has repaid about 25 percent of the verified losses.
UCA has said Proctor, who resigned last month, was not implicated in wrongdoing.
The embezzlement is currently under criminal investigation by West Valley City police, assisted by the Salt Lake County district attorney and the FBI, according to police spokeswoman Roxeanne Vainuku.
One lawmaker, Orem Rep. Keven Stratton, questioned UCA Board Chairwoman Tina Mathieu why she didn't make lawmakers aware of the fraud during the last legislative session when bills affecting and funding the agency were being debated.
Mathieu said she believed the financial problems at that time were mistakes and she wasn't made aware of the extent of them until later. When Stratton pressed for an exact date she knew of the embezzlement, she was unable to answer until Stephens, the attorney, whispered in her ear, and she said it was Feb. 19.
Nelson was fired Feb. 22 but she had been placed on administrative leave Jan. 11, the first business day after a suspicious and it turns out falsified credit card statement was discovered by another employee on an office printer.
In addition to the apparent criminal activity, auditors said the agency had other problems namely failing to publicly report its finances and repeated violations of the Open and Public Meetings Act.
Among open-meetings lapses: it failed to provide the required 24-hour advance notice of five meetings, publishing them after the meeting in one case seven months after the fact. Votes, by individual member's names, were not reflected at all in board minutes, according to the audit. Almost half of the board votes that did occur were not recorded in minutes in any form.
Mathieu said the board has instituted recommended reforms, a point that Pulsipher, the audit director, acknowledged.
"We didn't break the law intentionally, we have nothing to hide from the public," Mathieu said.
One change, though, has been strongly resisted by the board that lawmakers at least consider reining in the agency.
"Due to the significance of the concerns cited in this report, we recommend the Legislature review UCA's status as an independent state entity," the audit said, noting its plans for a $240 million expansion and upgrade.
Mathieu pointed to the fact that 75 percent of UCA assets were paid for and are owned by local government stakeholders. She also expressed concern that any move that could lead to dissolving the independent, statewide coordinated network could harm law-enforcement and first responders. She cited an Arizona instance where more than a dozen firefighters perished because of lack of communications.
Moreover, Mathieu said, the board has acted responsibly and swiftly to correct problems.
"We have been aggressively addressing the concerns," she said.
Rep. Brad Dee, R-Ogden, defended the agency, saying since the scandal broke last month UCA is probably the most scrutinized agency in the state. He expressed confidence in Mathieu's ability to correct problems. "They've changed every policy that has been suggested to them to make sure that this doesn't happen again," he said.
Legislative leaders on Tuesday put a hold until $17 million in funds earmarked for UCA until it complies with a checklist of fixes, including hiring a new director.