Auditor Questions County’S Proceedings Bonner County Clerk Talked To Member Of Audit Staff About A Job Before Report Was Complete

Government audits are supposed to be squeaky clean.

So Mike Merrell has been trying to scrub a smudge off Bonner County’s 1997 audit for a couple of years now.

But he hasn’t gotten much cooperation from Bonner County officials, he said, and now they refuse to pay the bill for his extra elbow grease.

Merrell, of Merrell & Hutchens Certified Public Accountants, was the auditor for the county’s 1997 audit.

Less than a week after the audit was presented to the Bonner County Board of Commissioners, county Clerk Marie Scott talked to Merrell’s employee, accountant Kristina English, about a job with the county.

The problem is: Scott talked to English about the job before the audit was complete.

What disturbed Merrell, he said, was that the audit showed 11 reportable conditions and weaknesses in the county’s internal accounting controls, “three of which were serious.”

Loose internal controls have been blamed for allowing employees to embezzle county funds. Two county employees have been caught embezzling in the past few years.

“Then here I find out that at some point there was talk of deals being made between the county clerk and the staff who was doing most of the work on the audit,” Merrell said.

The “deals” Merrell refers to was a four-minute discussion in Safeway, Scott and English said.

English was on vacation when the two bumped into each other in the store. Scott, who had been impressed with English’s accounting skills, asked English if she was interested in a career change.

“It wasn’t an offer to hire at the time,” Scott said Thursday.

English was called back in to work on Jan. 14, a day or two after the Safeway encounter, to do some “wrap-up” work on the county audit, Merrell said.

English clocked 9 hours that day but didn’t mention to Merrell the discussion she had had with Scott. If she had, Merrell said, he would have pulled her off the county audit work to ensure that the firm maintained absolute independence in regard to the audit.

English said the work that day was mostly clerical.

“Maybe it wasn’t far over the line, but it was over the line,” Merrell said. “You do not like to see these kinds of things going on when there have been two embezzlements in the last few years.”

However, Merrell said he has no reason to believe that Scott’s discussion with English was in any way a bribe to change the outcome of the audit.

After English took the job offer with the county, Merrell investigated the issue and considered it another reportable condition that ought to be included in the audit.

He also filed a complaint with the Idaho State Board of Accountancy.

In January, the state’s investigator concluded that English had violated the Code of Professional Conduct, but “we liken her violation to driving 67 miles per hour in a 65 mile per hour zone,” according to his report.

The state did not find that the job offer had any “material impact” on the audit, but did recommend that English attend at least 8 hours of professional standards training.

Meanwhile, Merrell prepared an addendum to the county’s 1997 audit, outlining the ethics violation, and has charged the county $2,625 for his additional work.

In a letter to the county prosecutor last month, Commissioner Bud Mueller asked if the county should have to pay the bill, or whether they could “hold the individual responsible.”

On Wednesday, County Commission Chairman Dale Van Stone sent Merrell a letter refusing payment, saying that the billing was unfounded because the state investigation did not find any problem with the audit.

“C’mon guys, jeez. Let’s just fess up,” Merrell said Thursday, after receiving the letter.

Since the 1997 audit, the county has switched auditing firms to LeMaster & Daniels, public accountants in Coeur d’Alene. Merrell said he’s not sorry to lose the county as a client.