By Mark Waite
Nye County Commission Chairman Butch Borasky eventually got the votes Tuesday to hire Chief Deputy Treasurer Kim Lara as the temporary Nye County treasurer, after there was talk the Nevada Department of Taxation may take over the county’s finances in the wake of Treasurer Mike Maher’s resignation.
Borasky had to wait for Commissioner Dan Schinhofen to phone in from Carson City where he was attending a meeting of the state Legislature, to get a 3-2 vote to hire the interim treasurer.
Commissioner Lorinda Wichman repeatedly made the motion but there was no second until Schinhofen was contacted; the chairman can’t second a motion.
“Folks, we have stuff we have got to get done. We have things that have to get moving that need a treasurer,” Wichman said.
Commissioners without much discussion approved a contract with former treasurer Gary Budahl, who lost his bid for re-election to Maher in 2010, for support services. Budahl’s contract lasts from April 1 through July 31, or until the county appoints a treasurer. He will be paid $60 per hour for working up to 30 hours per week, with a cap of $25,000 on the contract.
Commissioners will also advertise for Maher’s replacement. His resignation takes effect March 30. He cited medical reasons for stepping down. Maher’s term expires December 2014 and he recommended Lara be appointed.
Nye County District Attorney Brian Kunzi stressed the urgency of the situation.
“It seems to me we are buying off on the idea that the only problem with this office is trying to get data entry in there. This is not what this is about. We cannot complete the audit. We are not in compliance with the Department of Taxation regulations. We are constantly being barraged, we’re in communication with the Nevada Department of Taxation,” Kunzi said.
One of the possible fallouts of the delay is the handing over of the county’s investigation of Sheriff Tony DeMeo to the state attorney general’s office for overspending his fiscal year 2011-12 budget by more than $1 million. Commissioners voted on the prosecution last October.
“We can’t do anything until we get a completed audit. We don’t know who’s overspent their budget until we get a complete audit. We are in a holding pattern until we get this audit,” Kunzi said.
Wichman added, “We have things that have been in the works for many, many, many months that requires a policy statement from a treasurer but we don’t have a treasurer.”
Tonopah Town Board Chairman Horace Carlyle said he had the same discussion with county commissioners a year ago.
“I’m going to establish accountability if we don’t get a resolution to this problem,” Carlyle said, adding he believes there’s a violation of state law. “We are in violation of the Bureau of Taxation. We have asked for an extension. I don’t know if you asked for your extension. I don’t know all the rules but I know normally if you don’t conform to the Department of Taxation, if you’re in violation, the state can take over this county.”
Remarks from Deonne Contine, deputy director of the compliance division for the Nevada Department of Taxation, toned down the alarmist rhetoric.
“The only thing that I really know is that the audit reports are due and the county has had an extension until March 15 and they didn’t meet that extension,” she said.
The audit report for the fiscal year ending June 30, 2012 was due Nov. 30 by state law, Contine said. The audit report is normally sent to the Nevada Department of Taxation within 30 days after its reviewed by county commissioners, she said.
“Under Chapter 354 the state can take over, but it’s not just because the county’s late with their audit,” Contine said.
County auditor Dan McArthur wasn’t available for comment, but one high-ranking county official who did not wish to be named said that once Budahl and Lara start, the county will have it’s audit complete within 30 days. This official added that there was no evidence of embezzlement, fraud or any other improprieties at the treasurer’s office and that the county is taking corrective measures to comply with state regulations.
“That’s the last thing they want to do,” this official said regarding the possibility of the state taking over the county’s finances.
Still, Wichman said the situation was urgent, that monthly financial statements needed to be reconciled to bank statements.
“We don’t have any of the statements that have been reconciled for nearly a year. That is causing some issues with the town and people that are trying to do their budgets,” Wichman said. “She Lara needs someone in there on a contract basis that can get those two, the fund reconciliation and the bank reconciliation, done in a reasonable amount of time.”
County Manager Pam Webster said she contacted the state treasurer’s office, who told her they didn’t have the supplemental resources to assist the county, even on a paid basis.
In November 2011, former County Commissioner Joni Eastley threatened legal action against Maher for malfeasance in office as she demanded monthly reports from March through October. Reports were delivered the next month, but they weren’t reconciled with bank statements, there were also questionable “fill-in” numbers, like the amount of cash on hand that stayed the same each month, a high amount of outstanding checks and unallocated funds. Lara was paid overtime to reconcile the reports through Dec. 31, 2011.
Maher blamed the delays on the implementation of the new Tyler Technologies Eden software system that makes it difficult to reconcile bank disbursements. When Maher finally appeared before county commissioners in January 2012, he said the county was using four different accounting systems, none of which are compatible with each other, to take care of 16 bank accounts and 170 funds.
One county official, who did not want to be identified, said Maher’s failure to reconcile the accounts was not because he didn’t try. This official said Maher worked overtime and on weekends to fulfill his duties but simply was unable to finish his work on time. This official said they suspect Maher is telling the truth about his health problems.
“It’s a question of getting complicated work done. I just don’t think he could do it,” this official said.
Asked whether there was any evidence Maher falsified county financial records in order to cover up his inability to complete the work, multiple county sources said they would not go that far.
“I never said any report was falsified and I have no evidence any report was falsified. Questions about the accuracy of the reports has been reported in previous meetings of the Board of County Commissioners,” Kunzi wrote in response to email queries Thursday.
Maher had a defender during Tuesday’s meeting, though he didn’t show up to defend himself. Amargosa Valley resident John Bosta said the county had the same problem in 2009 with Budahl, who was paid only $37 per hour as treasurer then. Budahl had offered to step in and rectify the situation for $50 per hour in January 2012.
Bosta said, “we’re hiring the fox to guard the hen house.”
When the controversy first arose about Maher, Bosta reminded commissioners the comptroller, at that time the county manager, was required by state law to file quarterly reports.
“He Budahl did the first two reports in 2010 and left the next three reports left undone,” Bosta said. “Then Mr. Maher was criticized when he attempted to clean up the previous year when the treasurer left.”
Bosta said he thought the office could function with the deputies it had.
He said, “The old saying in computer language is garbage in, garbage out.”
Maher was appointed Nye County manager after the termination of David Chavez in June 2003. But Maher was terminated himself in March 2006 along with former comptroller Marie Owens, for failing to notify commissioners for six months the Nevada Department of Taxation refused their request for a $3 million loan to balance the budget. Maher ran unsuccessfully for the District 4 county commission seat in 2006, where he finished fourth out of five candidates in the primary with 130 votes, 16.5 percent of the total.
PVT editor Matt Ward contributed to this report.