Treasurer investigation under way amid new allegations

By Michael Howell

In the week following Ravalli County Treasurer Valerie Stamey’s departure from her office on administrative leave, county staffers have been attempting to organize the data she left in her wake, discovering more than $800,000 in undeposited tax payments which are now in the bank. An estimated payment of $4 million was sent to the Montana Department of Revenue to avoid thousands of dollars in interest. The county offered a temporary contract to a former Beaverhead County treasurer to catch up on the work that has been piling up in the treasurer’s department since September. The commissioners have scheduled a meeting on February 18 to decide whether to levy fines against Stamey for not completing statutory reports and Ravalli County Attorney Bill Fulbright has hired a firm to do a special audit of the treasurer’s office. The state Department of Criminal Investigation will be conducting its own investigation. And Stamey and another treasurer’s office employee have made new allegations against the county of further wrongdoing.

Corvallis School District lodges complaint

The Corvallis School District filed a formal complaint with the County Commissioners last Tuesday, January 28, about not having received a “Cash Report” from the Ravalli County Treasurer since September. The district normally receives a cash report, including interest earned, by the 25^th of the following month. The school district did receive an October Treasurer’s Report on January 2, but that report is pending corrections at the county level.

The district quotes the law to the commissioners about how these itemized reports for each fund maintained by the district will show paid warrants, registered warrants, interest distribution, amounts and types of revenue received, and the cash balance. It also requires that the monies received from basic county taxes for elementary and high school equalization, the county levy in support of the elementary and high school district retirement obligations, and the county levy in support of the transportation schedules, be invested within three working days of receipt.

“This letter is requesting the Commission to do whatever is necessary to get the reports to the district. This failure of the Treasurer’s office to submit timely reports to the district is keeping our employees from executing their required duties,” concludes the letter from the school board.

DOR demands funds, and gets them

The County also received a letter from the Montana Department of Revenue (DOR) on Tuesday, January 28, informing the commissioners that the County Collection Reports and associated money due to the State of Montana for the months of October, November and December are delinquent. These reports are due to the state by the 20^th day of the subsequent month following the end of each month.

The department notes that, pursuant to law, “if the reports and funds have not been received by Monday, February 3, 2014, the DOR intends to impose interest on the late filings which is 10% annually.”

DOR estimated, based on last year’s figures during these months, that the outstanding interest would be more than $37,000. The actual interest would be calculated once the reports are submitted, the letter states.

According to Commission Chairman Greg Chilcott, a deal was worked out that if the county sent the $4 million in estimated revenues for the period by Friday, January 31, the DOR would not assess the $37,000 in interest and would delay the demand for reports. The wire transfer of $4 million took place on Friday as promised.

That payment, based on last year’s figures, will still have to be reconciled at some point. CFO Klarysse Murphy told the Commissioners that it will not turn out to be an overpayment.

Over $800,000 in tax payments found

Following the placement of Ravalli County Treasurer Valorie Stamey on administrative leave, Clerk and Recorder Regina Plettenberg and newly hired treasurer’s department employee Dan Whitesitt were placed in charge of keeping the office open and running day to day affairs. On Monday, January 24, Pletttenberg and Whitesitt and Human Resources Director Robert Jenni were accompanied by Undersheriff Steve Holten when they entered the treasurer’s office in an attempt to locate any tax payments that might need to be deposited.

The doors were locked after Stamey was placed on leave on Thursday, January 20. What they found, according to Holten’s report, were two white open top boxes, one brown open top box, a USPS tray, and three legal sized manila envelopes containing checks for tax payments. According to Plettenberg, a total of more than $800,000 in tax checks and some cash was found in the boxes and envelopes.

County contracts with former Beaverhead County Treasurer for reconciliation work

Human Resources Director Robert Jenni told the Commissioners last week that he had contacted several treasurers and former treasurers seeking help in getting the office up to speed but had gotten only one response, from a former treasurer in Beaverhead County, Kathy Allard. He said that she was experienced in Black Mountain software and in the MERLIN system.

Clerk and Recorder Regina Plettenberg told the Commissioners that the day to day office work was being done but that it was essential that the reconciliation be done continually as well.

Asked about Allard’s resume and references, Jenni said that if they selected her he would conduct both a financial and criminal background check.

“One thing we’ve learned,” said Commissioner Suzy Foss, “is that the treasurer has duties above and beyond the motor vehicle and tax side.”

Jenni said that the preliminary estimate of costs if she was paid $35 per hour and paid for meals, lodging and mileage, was a total of about $9,500 per month.

The commissioners eventually approved spending up to $10,000 for a one month contract with Allard to do the reconciliations and get the reports out.

It was also agreed at a subsequent meeting to place the names of Greg Chilcott, Dan Whitesitt and Regina Plettenberg on the Treasurer’s Account. At another meeting it was agreed to set up a special line-item account in the budget to track all the expenditures related to the current issues in the Treasurer’s office.

County takes steps to penalize treasurer for delinquent reports

The county commissioners took the initial step towards collecting a forfeiture of $500 for every delinquent treasurer’s report to date. The Bitterroot Star had expressed in a letter to the commissioners earlier that Montana statute (7-6-612 MCA) outlines some of the duties imposed on the treasurer and that the treasurer reports being demanded by the various entities in the county were one of these required duties. A subsequent statute (7-6-2113 MCA) states that a treasurer will forfeit $500 for each delinquent report and that “the commissioners shall institute the suits necessary for the recovery of those sums.”

At the meeting to discuss the issue, Commissioner Suzy Foss immediately raised the question, “Was it clear to the treasurer that we were requiring those reports?”

Commissioner Jeff Burrows said that it was pretty clear to him that the law imposed a fine and that the commissioners “shall” institute the suits to collect it.

Deputy County Attorney Howard Recht cautioned that the law was a bit vague. He also suggested that if the commissioners wanted to proceed to instituting any suits in relation to the laws that they hold a public meeting. But since the treasurer is on administrative leave they should give her a letter of notice that the issue was being considered and give her two weeks to prepare for the meeting. He said at that meeting the treasurer could offer reasons for not being in violation of the law and the commissioners could then decide whether to move forward with the suits or not.

Commissioner Ron Stoltz raised a concern that dealing with these things could slow down the work at the treasurer’s office and slow down the county attorney’s investigation and Foss agreed.

Recht noted that the investigation being conducted was not being done directly by the county attorney’s office so that investigation would not be slowed down.

Burrows said that the law seemed to oblige them to move forward to collect the fines and made a motion to that effect.

In public comment, Dan Floyd said that the commissioners had an operational problem that needed to be addressed. He said that they had stopped Stamey from doing her job.

Others argued for enforcement of the laws and urged that the decision be made now.

Recht warned the commissioners that in his opinion, without a letter giving two weeks notice of the meeting, any decision would not be legally sufficient.

Burrows withdrew his motion and instead made a motion to meet on Monday, February 3 at 1:30 p.m. to decide on sending a letter of notice that a meeting was scheduled for February 18, at 2 p.m. to consider initiating suits for collection of the forfeiture for delinquent reports.

 

County Attorney hires auditing firm, DCI will investigate alleged crimes

Ravalli County Attorney Bill Fulbright announced in a press release that he had engaged the auditing firm of Anderson ZurMuehlen & Co., PC, to conduct an independent audit of the Treasurer’s Office. He said it was the largest Montana based CPA firm with six offices statewide. The firm will employee a governmental specialty team of CPA auditing and Certified Fraud Examiner personnel from its Butte, Helena and Bozeman locations. James Woy, CPA, Business Director of Attest for Anderson ZurMuehlen, will oversee the independent examination.

According to Woy, the examination will focus on determining the current status of the treasurer’s office including providing an opinion on reconciliation of all agency accounts and county bank accounts through the current date. Determining the completeness of these reconciliations will provide the necessary assurance that all receipts submitted to the treasurer’s office have been properly accounted for, recorded and reported to the citizens of Ravalli County.

A preliminary report of this independent audit is expected within the next two weeks, according to the press release.

“I also can assure the public that for decades Ravalli County has gone through an annual countywide audit of all accounts, departments and offices, in compliance with Montana law and county policy,” stated Fulbright in the release. “Those audits have always been available to the public for review, with the most recent years’ audits available on the Ravalli County website at http://rc.mt.gov/commissioners/Budgets.mcpx.

“I urge all to refrain from perpetuating the accusations being tossed around without first checking facts, and to await the findings of the independent audit,” wrote Fulbright.

Fulbright said that he and Sheriff Chris Hoffman had requested the assistance of the Montana Division of Criminal Investigation (DCI) to investigate the various allegations of criminal misconduct being made. DCI, a division of the Montana Department of Justice tasked with a wide variety of investigations throughout Montana, will coordinate its activities with the audit team.

“We express our appreciation to Attorney General Fox and the DCI agents, but cannot comment further on this independent investigation,” concluded Fulbright.

Allegations multiply in the case

County Treasurer Valerie Stamey’s attorney of record, Robert Myers, is also now claiming to represent another recent employee of the treasurer’s office, Michelle Pope. Myers claims to have been retained by Pope to bring suit against treasurer office employee Bonnie Dugan, Commissioner Jeff Burrows and Ravalli County.

In a letter dated January 27, 2014 and addressed to Human Resource Director Robert Jenni, Myers notes that Pope e-mailed Jenni saying she was warned that she might be in a dangerous situation in the Treasurer’s Office as “Ravalli County has very peculiar ways” of dealing with suspected whistle blowers. Myers states that the warning was “motivated by the hearing of a conversation of Commissioner Jeff Burrows.” He states that the warning has caused his client substantial emotional distress and says it is “warranted given a previous attempt at framing Ms. Pope for stealing money by tax clerk Bonnie Dugan.”

“The implication is clear that Ms. Pope was the employee who found that the deposit receipt files of all of Ravalli County departments and offices are either missing or unused in years and as such must be tarnished,” wrote Myers.

He then accuses Dugan of fabricating the evidence that Pope had stolen some money.

“Bonnie Dugan’s attempt to frame Ms. Pope was shown to be fraudulent,” wrote Myers, without elaborating. He states that it is a felony to fabricate evidence to initiate an investigation.

Myers claims that Jenni was aware of this and other acts by Dugan and yet failed to contact law enforcement and failed to remove Dugan from her job. He blames Commissioner Burrows for not removing Dugan as well and demands that the county keep Pope safe while she works.

Two days later, on January 29, Stamey added further allegations of her own and included County Attorney Bill Fulbright now in her long list of alleged law breakers. She accuses Fulbright in his role as County Auditor of failing to examine the county’s books and accounts as required by law. She claims that law requires the County Auditor to examine and report on the books and accounts of the county treasurer, the county clerk and recorder, the sheriff, the clerk of district court and all other county and township officers “within 15 days prior to the first regular session of the board of county commissioners in March, June, September and December.”

Stamey claims that she has shown that the “receipts of deposits of all branches of Ravalli County government are either missing in entirety or have not been kept for the past four to six years.” She claims Fulbright should have known about this and reported it.

“The historic mess of the books and accounts of Ravalli County must sit on the shoulders of Bill Fulbright and the Ravalli County Commissioners who also failed to ensure that Bill Fulbright was doing his job,” wrote Stamey in an e-mail to a television news editor.

“The Ravalli County Commissioners should place themselves and Bill Fulbright on administrative leave pending a full investigation of their failure and the failure of Bill Fulbright to protect the financial accounts and records of Ravalli County,” wrote Stamey.

Stamey gives them a deadline of February 3, 2014 at 10 a.m. to produce the quarterly reports for the last ten years or “I will assume no such reports exist and take required action.”

Commission Chair Greg Chilcott said on Monday afternoon, February 3, that no action had been taken to produce the reports requested by Stamey since the county has completed yearly audits every year and all that information is readily available to the public as are the county’s books.