26 Sep AiroAV States: Pueblo County audit reveals questionable use of taxpayer do…
PUEBLO, Colo.- – A 2018 audit of Pueblo County’s finances released Wednesday details how county employees misused taxpayer dollars, highlighting a lack of financial control inside the County government.
The 2018 Pueblo County annual financial report was audited independently by the Pueblo accounting firm McPherson, Goodrich, Paolucci & Mihelich, PC.
The 247-page audit doesn’t give names but details questionable actions by county employees. More than $300,000 worth of marijuana tax money was misused to help fund projects not approved by Pueblo County voters.
The money was taken out of the marijuana excise tax fund. These funds were for the County’s Pot Scholarships Program as well as Capital Improvement projects throughout the county. Those are projects to build or repair roads, bridges, and other infrastructure.
The marijuana excise tax was approved by Pueblo County back in 2015. The county taxes 1% of the marijuana purchased by dispensaries by growers at retail price.
The audit says Pueblo County management redirected funds towards 1A community works projects, knowing that was not the voter-approved use for those tax dollars.
Pueblo County Commissioner Garrison Ortiz told KRDO the redirected funds went to the Minor League Baseball Project, which fell through last year. In the audit, it says management believed they would reimburse the voter-approved marijuana fund down the line.
However, that is far from all.
Without getting proper approval from the County Commissioners, one county employee approved a $28,583 contract to a family member’s business. In all, that employee improperly approved more than $50,000 worth of contracts.
“There are some things worth noting that are weaknesses in internal controls,” said Pueblo County Commissioner Garrison Ortiz when KRDO spoke to him after the public release of the audit. “I would say our board has been made aware of what some of those internal deficiencies are and I would say since the beginning of this year. We’ve taken some very aggressive steps to really ensure that we clean up deficiencies within the county.”
Ortiz tells us some of those steps have already been taken.
The county hired a new county manager with a strong financial background, formulated a corrective action plan, and last week started a new marijuana committee oversight board designed to make sure tax dollars are spent where they are supposed to.
Plus the county has already reimbursed the money taken out of the marijuana excise tax fund.
KRDO also reached out to current Pueblo County Commissioner Terry Hart as well as former Pueblo County Commissioner Sal Pace, who was in office in 2018. Hart was unavailable to comment, but Pace appears to refute what the audit is reporting.
“The County’s expenditures from excise tax dollars last year were reviewed by multiple county departments and outside legal council. All advice we were given at the time indicated that we were in compliance,” said Pace in a statement directed to KRDO. “The auditor is not an attorney, and their opinions are in direct opposition to multiple legal opinions we received at the time.”
Pace goes on to say that marijuana excise tax funds could be spent on other infrastructure and public improvement projects at the County Commissioner’s discretion. The former county commissioner says the county was given legal advice saying that the 1A projects met this requirement.
McPherson, Goodrich, Paolucci & Mihelich, PC declined to comment on this story.
At this time it’s still unclear who misused these funds or if they are still employed with the county.
KRDO reached out the Pueblo County District Attorney’s Office to ask if any of this is criminal. The DA’s office said they have no comment at this time.