Audit will look at Langley officials’ pay, whistleblower issues

Officials from the Washington State Auditor’s Office strongly hinted that several of the controversies that have dogged Langley in recent months will be examined as part of the state’s early audit of the Village by the Sea.

City officials met with three representatives from the auditor’s office on Wednesday for an “entrance conference” that kicked off an early audit prompted by citizen complaint calls to the state auditor.

Mayor Paul Samuelson, Finance Director Debbie Mahler and the entire council attended the meeting with Casey Dwyer, an audit manager from the state auditor’s Everett office, and two other auditors.

In the audience during the 20-minute meeting were Planning Director Larry Cort; Public Works Director Challis Stringer; Kathleen Landel, special assistant to the mayor; and a half dozen residents, including Russell Sparkman, who resigned from the city council this past month.

Dwyer outlined the review process, and said it will center on an accountability audit on the use of public resources and legal compliance.

“That broad area really covers a lot of topics,” she said, noting the tailored list of areas that the audit will examine.

The audit will evaluate accountability and compliance with state laws and regulations on contracts and agreements, compensation of elected officials, hotel-motel tax disbursements, the Open Public Meetings Act, records retention, whistleblower policy, citizen advisory committees, manual warrants and indirect cost allocation (basically, charges made to utility funds).

“It is very specific to the city,” she said.

Langley has been in near-continuous turmoil since July, after city hall learned that Mahler had asked the county prosecutor to investigate her concerns that Samuelson was getting paid for vacation time he hadn’t earned.

City hall also came under fire for high costs associated with a contract for the city’s building official.

Two whistleblower complaints were filed against the building official, which claimed he had padded his hours in bills while making $93,420 in 2008 and earning more than $259,000 over the past three years while development and building activity had plummeted in the city.

Critics complained a proper investigation was not conducted on the whistleblower complaints, and said city officials dragged their feet before looking into the matter.

Langley is audited by the state on a two-year cycle. The city was last audited in 2009, and that review covered the span between January 2007 and December 2008.

That audit was released in late September 2009, and was accompanied by a “management letter” sent to city officials that listed a number of concerns over payroll and payment issues.

The management letter noted the council and mayor were responsible for providing oversight of payments to vendors and city employees “to ensure they are allowable and to safeguard against misappropriation of public funds.”

The letter said auditors found seven instances where a series of warrants — 251 in all — were not documented on claim vouchers or mentioned in the minutes of council meetings. Warrants are basically checks that a city issues for payment, and function the same as a typical bank-issued check for payment.

Auditors also discovered that the council did not approve three months of payroll expenditures in 2007 and 2008.

Dwyer, the audit manager who signed the management letter, told city officials during Wednesday’s meeting that the field work in Langley is scheduled to end on Nov. 19, with an “exit conference” with city officials coming about a month later.

The release of the audit would follow a month or two after the exit conference.

The audit will cost the city $9,432 plus travel costs.

The rest of the audit — a review of the city’s financial statements — will be wrapped up in 2011.

“I look forward to the results,” Councilman Bob Waterman said at the close of Wednesday’s meeting.

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