City of Lincoln: Vote to request independent audits of Logan County Alliance and Tourism Bureau passes 5-2
Part one: LCA board members address the council

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[March 28, 2016]  LINCOLN - Monday evening, the discussions continued regarding the Logan County Alliance (LCA) and Logan County Tourism Bureau at the voting session of the Lincoln City Council. On the agenda for the night was a motion to request a full independent audit of each entity, at the expense of the city.

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:

Present quarterly 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 year ends.


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 results.

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.”

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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 private organization.

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 elsewhere.

This ended the presentation by O’Donohue and Snyder. The next person called on under public participation was Leslie Hoefle.

[Nila Smith]

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