A number of people weighed in on the topic during public
participation including Tom O’Donohue and Keith Snyder of the LCA,
Leslie Hoefle, and Lance Rainforth.
The first to speak was O’Donohue and Snyder. O’Donohue was there as
the chairman of the LCA with Snyder as the treasurer. Sal Pollice,
as chairman of the Tourism Bureau, had intended to be present as
well but was called away at the last minute.
Snyder opened by commenting on a statement made by Mayor Marty
Neitzel at the ribbon cutting ceremony for the Lincoln Grand 8
Theater. There she had said that the community can only move forward
if we communicate and all work together. Snyder said that though the
Alliance had not been communicated with prior to the discussions
(about the audit) that took place on March 15th, they were coming
now, to have that open communication with the council.
Snyder then walked through three documents, he provided copies to
the aldermen. The first was the funding agreement between the city
and the LCA pertaining to Economic Development. He pointed out a
particular section of the agreement between the LCA and city, noting
that it clearly stated that the Alliance is to:
Provide an annual
report and submit it to the City Council no later than April 1,
2016, detailing the following:
1. Activities and results of the efforts put forth by the LCA in
providing economic development services for the city;
2. An accountability report on the expenditures and use of the City
funds provided pursuant to this Agreement, and;
3. Any recommendations on improving the economic development
services afforded to the City pursuant to this Agreement or any
other action of the City Council.
He said that the LCA had committed to those reports, and they
intended to follow through. Snyder pointed out on the next page of
the agreement that the LCA has given the city the right to the
independent without any additional action being taken. He said
therefore, he didn’t believe the city needed to vote on that item,
except to approve the expenditure of the funds.
He then moved on to the funding agreement between the city and the
Tourism Bureau. He noted section 13 that said:
updates to the City Council and provide an annual report to the City
no later than April 1, 2016, detailing the following:
A. An accountability report pertaining to the usage of city funds
B. Updates on the above commitments.
Snyder noted that there was no section giving the city the right to
audit tourism funds. But, he said the Tourism Bureau is currently
doing audits on multiple years.
The Bureau has hired Kerber, Eck, and Braeckel (KEB) of Springfield
to perform complete audits for the fiscal years ending June 30th,
2013 and June 30th, 2014. The Bureau has also requested a third
audit for the six month period beginning July 1, 2014, and ending
December 31, 2014.
Snyder said the dates had been chosen based on the last official
audit done, which was for the fiscal year that ended June 30th,
2012. The Bureau had then requested that the six-month audit be done
so that for 2015, the audits from then forward will be done on the
calendar year, which is also the actual fiscal year for the Bureau.
Writer note: The
fiscal years for the Bureau are more complicated than most. Because
they have State of Illinois grants, the state considers the fiscal
year to be July 1 to June 30th. The money administered by the city
is based on the city’s fiscal year of May 1 through April 30. The
Bureau itself has always had a fiscal year that coincides with the
calendar year. This came into question at a previous meeting,
because based on the variety of calendar years the Bureau works in,
they had taken money from the city twice in one year for certain
sub-grants, but only once per year according to the other fiscal
Snyder moved on, talking about discussions last week about the
actual auditors that might be used and ethical practices. He read a
portion of a letter written by Kathleen Ward, of KEB:
“As a firm providing
public auditing services, we are required to follow the Code of
Professional Conduct issued by the IACPA. This requires our firm to
maintain objectivity and integrity, be free of conflicts of
interest, and not knowingly misrepresent facts or subordinate our
judgment to others. We are required to remain independent when
performing auditing service for a client. As a part of every audit
we perform, we assess our independence and if any threats to our
independence exist. No threats were noted upon acceptance of the
audit of the Bureau.”
He said that he wanted to assure the city that the Tourism Bureau
had not hired a “shady firm” to conduct these audits. Snyder said
that though he and O’Donohue could not officially speak for the
Tourism Council, they believed the Bureau Council would be open to
sharing all the audit results with the city.
It was also noted that city alderman Steve Parrott sits on the
Bureau Council, and he would most certainly see all the audit
Snyder wrapped up saying that he understood there was some concern
over spending taxpayer dollars. He said, “I think a likely question
would be why the city would be expending general revenue dollars to
replicate an independent audit already being performed.”
[to top of second column]
O’Donohue spoke next, representing the LCA and Chamber. He again commented on
Neitzel's remarks about communication, and said he and Snyder had come in that
spirit of communications.
He said that the LCA is a DBA (Doing Business As) and is still the Chamber of
Commerce doing business as the Logan County Alliance. The Chamber is a 501(C)6
He said the point he wanted to make is that the Chamber is an independent,
private organization, and as such he does not believe the city has the legal
right to request a complete audit. The city does have the right to audit the
Economic Development component, and the Alliance has no issues with that, but
they will “contest” an audit of the full organization “on principal.”
O’Donohue moved on to addressing the presentation made by Leslie Hoefle at the
March 7th meeting of the city council. He said he had not been present that
night but had been told that the presentation was “to the point.” He said since
then, the board has thought about Hoefle and discussed her interest and concern.
There is currently an open seat on the LCA board, and O’Donohue said the LCA
would be open to having Hoefle fill that seat.
He said in addition, in the past the LCA board had not embraced the idea of ex
officio membership on the board, but they were now prepared to offer the city
representation as ex officio members.
With that said, the floor opened to questions from the city council. Todd
Mourning asked about the years being audited at the Tourism Bureau, noting there
was no 2015 audit on the schedule. He asked if there was an intent to do a 2015
audit and how soon that would occur.
Snyder said that because of the transitions that have taken place in the last
two to three years at tourism, the bureau was “a little behind” on performing
their audits. He said KEB was scheduled to wrap up the current audit requests by
the end of April. He thought that the 2015 audit could be started soon after the
review of the current project by the Tourism Council.
Mourning then asked if the city administrator and treasurer could be involved in
the review of those new audits. O’Donohue said that he and Snyder could not
answer for the Tourism Council, but at the same time, he didn’t see how the
request would be a problem.
Tracy Welch asked about the accounting structure for the LCA, Chamber, and
Tourism. He wanted to know about the separation of the records and if one person
was performing the accounting duties for all the entities. O’Donohue said, yes,
there was just one bookkeeper, but the three entities have separate books. He
noted that all the accounting is done through a Quick Books application.
Leslie Hoefle spoke from the gallery saying she was interested in becoming a
member of the LCA board. But, she said she still had questions. First, she
wanted to understand the membership of the organization and asked if Snyder and
O’Donohue were members of the Chamber/LCA, and noted that she was not a member.
O’Donohue said,yes, he and Snyder are members and there is a membership level
for individuals that would allow Hoefle to join.
Hoefle also asked then, if the city is a member, do they not have the right to
look at the financial records of the Chamber/LCA. O’Donohue said that any member
had the right to look at the day-to-day financial records, but not the right to
review the audit documents.
Hoefle and O’Donohue began discussing the terminology that has been used
regarding audits and audit reviews. Hoefle said that some of the issues were
unclear, and had been perhaps misunderstood in a Facebook post by Todd Mourning,
where he used the terminology “audit review” instead of “audit.”
At that point, Neitzel broke into the one-on-one conversation saying that the
discussion taking place was not addressing the council and should take place
This ended the presentation by O’Donohue and Snyder. The next person called on
under public participation was Leslie Hoefle.