State audit details how former Clay County commissioners obstructed citizen-initiated review of county operations

Missouri State Auditor Nicole Galloway today issued her office's audit of the Clay County Commission, which was initiated by a citizen petition in 2018. Today's report follows repeated but ultimately unsuccessful efforts by former county commissioners to impede the completion of the audit. The report, which gave a rating of "poor" - the lowest possible rating - details numerous significant concerns with county operations under the prior Commission.

"Today, the citizens of Clay County are finally getting the answers they have sought for years," Auditor Galloway said. "Two former county commissioners actively worked to prevent taxpayers from seeing how their money was being spent, not only by trying to impede this audit but by regularly conducting public business outside public view. I appreciate the cooperation of the current Commission in bringing this audit to completion and their willingness to implement our recommendations."

Auditors found that county taxpayers incurred $2.8 million in costs for a since-canceled county annex project that former commissioners pursued with minimal public involvement. The former County Commission approved various actions related to the annex project without publicly discussing the key decisions. As a result, there was little opportunity for public involvement in the decision to construct the new annex building.

Despite increasing public opposition, the former County Commission approved the acquisition of land as well as engineering, architectural, project management and other services for the new annex. The county allowed one commissioner to approve millions of dollars in contracts related to the project. While the new Commission has stopped the annex project, the millions already spent is unlikely to be recovered, and taxpayers will derive little or no benefit from the costs the former commission incurred for the annex project.

The former County Commission also approved employment contracts for the County Administrator and three assistant administrators that automatically renewed and included generous severance payments. In addition, the former County Commission executed separation agreements with each of those employees upon their resignation that provided additional severance benefits beyond the benefits outlined in the employment agreements. In the separation agreements with the County Administrator, assistant administrators and three other employees, the Commission acknowledged that the employees had legal claims against the county. The former County Commission agreed in closed meetings to provide the employees $315,363 in total settlement funds in addition to the $319,937 severance pay.

The former County Commission also executed lease agreements with five county employees for rent-free county housing for as long as they were employed by Clay County, in exchange for on-call services. The county had no policy authorizing such rentals to employees or establishing any guidelines about the process, and the county did not report the value of the rent-free housing fringe benefit to the IRS on the employees' W-2 forms. By not properly reporting the value of fringe benefits on employee W-2 forms, the county could potentially be subject to IRS penalties.

Auditors also found that the former County Commission regularly did not comply with the Sunshine Law regarding closed meetings and preservation of closed meeting minutes. In December 2017, the former County Commission eliminated public comments at regular commission meetings by removing that agenda item and replacing it with a public comment period held on one Friday per month. However, commissioners were not required to attend those meetings nor expected to make comments or respond to citizens if they did.

A complete copy of the audit report is available here.