Englewood City Council moves to audit EEF, but scope is undecided

Englewood Environmental Foundation has long generated controversy

Posted 12/14/18

About a month into the Englewood City Council's process of publicly grappling with accusations of financial improprieties in a nonprofit body run by city officials, the city is moving toward …

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Englewood City Council moves to audit EEF, but scope is undecided

Englewood Environmental Foundation has long generated controversy


About a month into the Englewood City Council's process of publicly grappling with accusations of financial improprieties in a nonprofit body run by city officials, the city is moving toward examining the claims, but what will be looked at is not yet clear.

“I don't want it to look like we're playing around with this,” said Councilmember Laurett Barrentine, the council's foremost critic of the Englewood Environmental Foundation, at a Dec. 3 council meeting.

Known as EEF, the nonprofit corporation — created by the city in the late 1990s — oversees property that the city has indirect influence over, including the Englewood Civic Center and the surrounding CityCenter Englewood shopping development.

After months of scrutiny over claims of past financial improprieties — such as accusations of giving work to friends and getting kickbacks — city staff recommended in early November that the council look into the claims against EEF with a forensic audit. Maria Sobota, the city's acting finance director and an EEF board member, recommended at the Dec. 3 meeting an audit that would, in part, seek evidence of “deficiencies in controls” and fraud.

It would also look at whether Taxpayer's Bill of Rights law — which restricts taxing and spending — was violated.

Barrentine voiced concern that the proposed audit focused too heavily on examining EEF's policies and procedures, advocating for a more strictly financial audit.

An audit that leans more toward evaluating how EEF runs is “not what the public is looking for,” Barrentine said.

Council largely agreed on moving forward with the wide-ranging proposal, but it isn't yet set in stone, and other, non-financial controversy has stemmed from EEF and the events surrounding it.

'Going back 20 years?'

As city staff initially recommended, a forensic audit could examine claims of mismanagement and allegations of criminal behavior. Thus far, such improprieties have not been proven, and a report by the 18th Judicial District Attorney's Office in April 2017 looked into them and found no evidence to support a criminal investigation.

Another road the city could take is a performance audit, which evaluates the effectiveness of how an organization runs. The council could seek an audit for both forensic and performance matters, Interim City Manager Dorothy Hargrove has said.

The audit's proposed scope, included in the online information for the council's Dec. 3 meeting, appears to aim for that combined approach: It would look to ensure that proper “controls and segregation of duties are in place to reduce the potential for fraud” and ensure that payments “have gone through authorized approval levels before (an) invoice is processed,” for example.

Councilmember Dave Cuesta asked Sobota during the Dec. 3 meeting if the audit would “be going over every line item going back 20 years.” The city created EEF in 1997.

“At the beginning, they would do samples,” Sobota said. “If they found issues that were deemed potentially involving fraud or other things, they would dig deeper. That's basically how an audit is typically done.”

Although EEF is separate from the city, its governing board consists of the directors of the city's public works, community development and finance departments. Sobota took the finance department's helm after former director Kathleen Rinkel decided to leave her position, a move officials announced in late September.

At the Dec. 3 meeting, Councilmembers Cuesta, Amy Martinez, Cheryl Wink and Mayor Pro Tem Rita Russell voiced support for moving ahead with Sobota's proposal, and Barrentine said she wanted the audit to better address concerns mentioned in the DA's office's report.

Some city employees believed in the past that overpayment for services and kickbacks — a former EEF board member receiving financial gain based on his relationship with service providers — was taking place, but no one had direct knowledge or evidence to back up the accusations, the DA's office's report said.

Mayor Linda Olson and Councilmember Othoniel Sierra were not at the Dec. 3 meeting. At the Nov. 13 council meeting, Olson said she does “want some performance piece in whatever audit it is.”

“I'm fine with doing financial auditing as part of that,” Olson said, adding she'd like to have the two kinds of audit be combined. She recently expressed desire to look at restructuring EEF to avoid having city staff in a precarious position or “feel like their professional positions are on the line over this.”

When asked by email if she would support a solely forensic audit, without performance-related aspects, she could not be reached for comment.

The audit is expected to cost roughly $55,000. EEF's funds, rather than the city's, will pay for the audit, and it's expected to take between three and six months, according to the Dec. 3 meeting information.

'Cloak and dagger'

Barrentine's push for transparency in the claims surrounding EEF has lasted years, but in March, multiple councilmembers took issue with her withholding information from the rest of them. She and Russell had the full DA's report on EEF, unbeknownst to the other councilmembers, for months.

During the March 5 council meeting, councilmembers considered a proposal for a performance audit of EEF and the Englewood McLellan Reservoir Foundation, a similar nonprofit run by city officials that was created to oversee property in the area of the reservoir near South Santa Fe Drive and C-470. Barrentine has been looking into concerns surrounding EEF and EMRF for five years, she said.

Barrentine and Russell wanted the council to talk in an executive session — a closed-door meeting often used to discuss matters the city deems to require confidentiality — about the DA's report before considering an audit. The two councilmembers are a longstanding coalition, usually voting in lockstep with each other and often opposing the other councilmembers' majority.

“We have met with the DA,” Russell said.

“Who's we?” now-Mayor Olson said.

“Councilmember Barrentine and myself,” Russell replied.

“When did this occur?” Olson asked.

“Months ago,” Russell said, adding that she had talked to Alison McKenney Brown, city attorney, about the matter.

“I'm a little frustrated that the rest of us don't know this has happened,” Olson said.

The back-and-forth referenced when Russell and Barrentine talked to DA George Brauchler in an impromptu run-in at a 2017 Colorado Municipal League event, asking him about the DA's office's examination of EEF and EMRF, Barrentine said. The city had received a communication from the DA's office — one or a few sentences long, the city attorney said — about the report, but the full council didn't receive the whole document, which is more than 20 pages long.

Russell and Barrentine met with investigators from the DA's office about the report, and Barrentine received it July 2017 through an open-records request, she said in a phone interview.

Cuesta asked during March council meeting if the report should have been shared with the rest of council.

“If that's public information … I don't see why we wouldn't discuss that on the dais in public,” Cuesta said. “I'm very confused as to what you guys are talking about. I feel like there's some cloak and dagger.”

Barrentine advocated for talking about the report in a closed-door meeting because “some councilmembers may feel they want to get some more information and maybe legal guidance,” she said at the March meeting.

Barrentine said she didn't share the report with the rest of council because the city attorney advised not to discuss it until she could meet with administrative city staff. The attorney met with staff to look into concerns surrounding EEF and EMRF, Brown said. Barrentine and Russell gave her the report soon after receiving it. The city attorney didn't say during the March meeting's conversation that she advised Barrentine and Russell not to tell the rest of council about the report. A city spokesman did not respond to a question about whether the attorney gave that advice.

“Due to the personnel issues included in the report, the city attorney advised us not to discuss the report,” Russell said via email. The report includes information — not pertaining to EEF or EMRF — on a separate matter involving people who have worked for the city, Barrentine noted via phone.

Olson pointed to council's general practice of making sure all councilmembers receive the same information.

“It's my understanding that we always try and make sure everyone knows everything, even if it has to be delivered in a confidential package,” Olson said at the meeting.

“I didn't do it on purpose to trick anybody or leave everybody out of the loop,” Barrentine said in an interview.

On the campaign website that supported Barrentine during this year's recall election, in which some constituents unsuccessfully sought to remove her from office, Barrentine put the full report online.

Barrentine alleged that a main reason for that Sept. 18 recall election was her desire for information on EEF and EMRF. The recall was brought forward by four residents including former Mayors Randy Penn, who served from 2011-15, and Jim Woodward, who served from 2007-11.

Asked why she decided to put the report on her website, she said, “I did a lot of vetting on that; I talked to a lot of people before I made that decision.”


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