An independent accountant’s report found no evidence of procedural wrongdoing by the City of Moab when it contracted a computer technology and consulting firm with ties to Moab City Manager Rebecca Davidson.
Larson and Company certified public accountant Russell Olsen presented the report’s findings to the Moab City Council at its regular meeting on Tuesday, June 28. He told the council that the report his company performed was not an audit, but rather “an agreed-upon procedure.”
“As accountants, we get pretty particular about the use of the word audit because to us it means something very, very specific, and to the rest of the world it means that we have looked at every possible thing that could go wrong,” Olsen said. “We came in and looked at some things and basically performed some procedures that were specified by the city.”
Olsen added that the scope of the report was very limited.
“The sufficiency of what we did, we’re not saying it was sufficient for anything, we did what we did, and that’s all we did,” he said.
Olsen said his firm reviewed the city’s purchasing policy to make sure that it was compliant with state regulations, and that the state auditor confirmed that a city has, by ordinance, the right to create its own purchasing policy. He said the report also looked at all transactions for a three-year period ending on June 10, 2016, including emergency purchases; expenditures for IT and engineering consulting services; and all expenditures over $7,000.
“For each of those categories of expenditures, we looked to make sure that they followed city policy, we made sure that they had sufficient documentation … and we looked to make sure an expenditure looked normal,” Olsen said. “In addition to that we looked to make sure there were disclosure statements on file.”
The city requested an audit in response to Grand County Council member Chris Baird’s allegations that Davidson failed to disclose a conflict of interest regarding her connections to the IT securities firm Tayo Inc.
The computer technology firm was formally registered at Davidson’s address; her housemate Tara Smelt co-owns it. Niyo Pearson, who is a past associate of Davidson’s, performed the bulk of the consulting work.
Baird filed a formal complaint with the Utah State Auditors Office, saying that the city was not in compliance with the state’s Uniform Fiscal Procedures Act because it did not put the contract out to bid.
Baird also said that the city’s decision to retain the consultant’s services amounted to a “very clear and obvious” conflict of interest because any profits that Tayo Inc. gained could increase Davidson’s household income.
Moab City Recorder and Assistant City Manager Rachel Stenta told the council on June 7 that she hired Tayo Inc. under an “emergency situation” exemption that allows the city to authorize expenditures without having to advertise and solicit sealed bids.
Stenta said that under former Moab City Manager Donna Metzler, the city did not have any formal standards regarding the acceptable uses of IT, and that the city was facing a serious security risk.
Metzler’s husband Mike Baird – who is not related to Chris Baird – worked as the city’s IT consultant for 16 years. During that time, Stenta said, the city never went through a competitive bidding process – even though other IT consultants were available in the community.
At the June 28 meeting, during the public hearing portion for a budget amendment, Baird told the council that if the letter of the law hadn’t been violated, then the intent of conflict disclosure and anti-nepotism policies had.
“The purpose of the spirit of these laws is to prohibit elected officials or city officials from engaging in activity that would produce an unfair advantage for someone that they are close with or associated with,” he said. “In this scenario, a city official would have to ask themselves, ‘Am I going to honor the intentions of these rules, or am I going to exploit the weaknesses in them?’”
Baird said that in September of last year, the council approved a budget amendment for IT services without being aware of the relationship between Davidson and Tayo Inc.
“If it were me, I wouldn’t vote for this amendment,” he said.
Davidson responded that she thought Baird was personalizing the situation.
“You do not know what I disclosed to the recorder,” she said. “You do not know the conversation I had with the attorney. You do not know what I have done and asked to make sure that I am not conflicting with any rules.”
Baird then asked Davidson if she felt that Tayo Inc. was hired under fair circumstances. Davidson did not respond.
Davidson told the Moab Sun News that there wasn’t a Tayo Inc. when the city first hired Pearson, and that the firm was created about two months later.
“And when that happened it was reported appropriately,” Davidson said. “I talked to the attorney and the purchasing agent … and I asked what I needed to do, and they said I didn’t need to do anything more.”
Davidson said it is important for the community to ask questions, but that they need to be done in a “constructive way.”
“I think Mr. Baird’s approach to this was very destructive,” she said. “There’s a lot we need to do here and they aren’t getting done because we’re distracted.”
Moab City Council member Tawny Knuteson-Boyd said that she was glad the city had undertaken the audit and that it “pretty much reiterated what the mayor, staff and council had said all along.”
“There will always be issues that need to be addressed,” Knuteson-Boyd said. “A city is staffed with people, living breathing humans with good qualities and bad.”
Knuteson-Boyd said that the city is in the process of updating and revising its human resources policies and procedures manual, along with its general plan.
“I think we have learned some of the areas that are not as concise and clear as they should be,” she said. “We will work on that.”
Moab Mayor Dave Sakrison said that he hoped everyone can move on from here. He also said he is looking forward to receiving “a clean bill of health” from the state auditor.
“We’ve done our due diligence and tried to answer the public,” he said. “We want to be as transparent as possible. Could we have done things differently? You bet. Are we taking steps? We are.”
Additional review by state auditor still to come
We’ve done our due diligence and tried to answer the public. We want to be as transparent as possible. Could we have done things differently? You bet. Are we taking steps? We are.