EVERETT – The Everett Public Facilities District doesn’t review its management company’s expenses closely enough, and made the mistake of buying alcohol for Global Spectrum employees, a report by the state Auditor’s Office concluded.
A separate auditor’s report found that the city of Everett needs to do more thorough background checks of groups before it gives them federal funds.
Neither problem is severe, said Mindy Chambers, a spokeswoman for the Auditor’s Office.
The office told the public facilities district to require more detailed travel expense reports from Global Spectrum, which manages the Everett Events Center.
“They need specific receipts to show what was purchased and the business purpose of those purchases,” Chambers said. “There were a couple of instances where alcoholic purchases were bought and reimbursed” by the district, something prohibited by state law and the district’s own rules.
One of the instances was a Global Spectrum employee from Philadelphia who stayed in Everett and had a glass of wine with dinner, said Fred Safstrom, executive director of the public facilities district.
The district initially reimbursed Global Spectrum for the employee’s dinner, including the wine. An internal audit caught the mistake, and Global Spectrum paid the district back for the glass of wine, he said. Safstrom said there have been no further cases of alcohol reimbursement.
The district board will now formally monitor Global Spectrum’s expenses. Previously, Safstrom and the district’s treasurer monitored expenses.
The finding against the city was the first in at least seven years of audits, Chambers said.
Everett has always required nonprofit groups to submit independent audits to the city before they can get federal housing money, said Dave Koenig, manager of long-range planning and community development for Everett.
“My belief is that we would have caught any problems,” he said.
However, the federal government wants the city to use a special Web site that lists groups that are ineligible for federal funds. The city wasn’t aware of that requirement, Koenig said. Previous audits didn’t show any problems, he said.
Pam Negri, a spokeswoman for the Seattle office of the Department of Housing and Urban Development, called the auditor’s findings against Everett “fairly minor” and said they shouldn’t affect the city’s ability to obtain future HUD grants.
Chambers said it’s relatively common for cities to be unaware of some federal regulations, because the list of requirements can be “exceptionally long and confusing.”
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