Audit of Springfield cites numerous liabilities

(Download the full audit report here.)

The report states that the city has accumulated “significant future liability” with investments in the Heer’s building and the Heer’s and College Station parking decks.

“After more than three years and contracting with two developers, the Heer’s Tower project is still in the initial phases,” the report reads. “During this time, the city pledged public funds to secure private financing for a developer to purchase the Heer’s Tower, paid $693,000 to the developer for demolition and design services without soliciting bids, subsequently paid $3.3 million to foreclose on the property, and then sold the Heer’s Tower for $3 million to a second developer.”

The audit also points out the unfunded liability of the Police Officers and Firemen’s Retirement System Plan, which has increased by $100 million since 2000. The report says that while the city has contributed $37.7 million to the plan in that time, required funding is rising faster than the city’s contribution.

City staff and council members were not able to comment on the report until its official release during a public meeting after SBJ’s press time Dec. 6.

Several other city liabilities were noted:

• approximately $2.7 million in bonded debt for the state crime lab without a revenue source;

• $8 million in city funds used to subsidize the Jordan Valley Ice Park and Car Park, which a city feasibility study said should have been self-supporting in the first year of operations;

• needed improvements at the city’s cash-collection points, which collect more than $48 million annually. The report identifies weaknesses in recording and accounting for receipts, timely depositing receipts and restricting employee access to computerized accounting records; and

• inadequate controls on the $6.6 million charged to the city’s 450 credit cards issued to various city employees. The report also found excessive spending limits, unnecessary purchases and inadequate documentation.

The report also notes that the city does not have an internal auditor as allowed by the city charter, “which could have helped in discovering and resolving several areas commented on in this report.”

The audit began last year as the result of a citizens’ petition from more than 5,000 registered voters.