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The $1 million fraud case that rocked the Utah Communications Authority (UCA) earlier this year continues to reverberate as the state auditor's office released recommendations Tuesday in wake of blistering criticism from the legislative auditor general.
The primary recommendation is to separate financial responsibility so a single person doesn't have the authority to authorize transactions or adjust accounting records and bank statements, all the while having access to cash and checks.
In April, the independent state agency announced that a "trusted employee" and her daughter embezzled $1 million over a 10-year period with credit-card purchases for personal items and trips.
In a letter to the UCA on Tuesday, a state audit director, Van Christensen, said his office's report "focuses on exceptions, weaknesses and problems" within the agency's financial-control systems. Chief among them, according to the report, are "inadequate separations of duties."
The state auditor recommends that an employee who prepares bank reconciliations not have access to the accounting system. The report also recommends that an employee without access to the billing function prepare deposits and reconcile cash receipts.
Further, procurement and disbursement policies should be implemented, including required purchase orders for all supplies and services, as well as competitive bidding for purchases over $1,000.
Not least, the state auditor suggests that the UCA formalize in writing its policies in order to prevent future errors and theft.
In 2010, the state auditor discovered that a significant number of UCA credit-card transactions were missing receipts and could not be verified. In a report issued last month, the legislative auditor general blasted the state auditor for not following up on those red flags — allowing the embezzlement to continue for five more years.
Former administrative assistant Patricia Nelson and her daughter Crystal Evans admitted in a civil lawsuit to charging personal expenses on the agency's credit cards and covering their tracks by manufacturing phony papers. Third District Judge Paul Maughan, overseeing the civil litigation, has ordered Nelson and Evans to pay the agency $2,328,000, which includes interest and punitive damages.
Former UCA Director Steven Proctor resigned in April. There were no allegations of wrongdoing on his part.
UCA continues to search for a new director.
The agency, overseen by a 25-member board, has little direct oversight by the state. It includes 25 counties and 147 public safety agencies, and it owns 20,000 radios.
UCA Chairwoman Tina Mathieu was not immediately available for comment.
A criminal investigation is ongoing in West Valley City, where the agency is based.