The city of Yukon is dealing with a major budget crisis after several financial discrepancies were discovered.
The discrepancies led city officials to hire a forensic accountant, whom outlined the dire situation the city is facing.
According to a press release issued by City of Yukon spokesperson Jenna Roberson, the city’s issues started in October 2015, when it was learned that $1.3 million earmarked for capital improvements was spent on general expenses. The investigation also revealed that city employees were not seeking out competitive bids on purchases.
City Ordinance directs employees to seek out competitive bids on purchases over $25,000, but investigators found that city employees were directed to disregard the rule, the press release stated.
An audit of Yukon’s 2015 fiscal year showed that the city misrepresented its condition, and had been using reserve funds to pay for expenses “for a number of years.” Perhaps most concerning is the fact that Yukon does not have enough money to pay for its expenses for the rest of 2016.
In order to pay its debts, Yukon is considering employee layoffs, liquidating assets and borrowing money.
The City Council is continuing to investigate the situation.
Derrel White, the managing partner for the certified public accounting firm FSW&B, released the following statement regarding this story:
"It is our opinion as the audit firm that performed the FY 2015 audit that the story that was leaked today was both premature and materially inaccurate. Due to a personal conflict between the former City Manager and the Mayor, it appears that the Mayor or someone within the City Council is trying to use a scorched earth tactic rather than allowing time to make a transition between the old accounting consultant and the new consultant. Both the former firm and the new firm as skilled municipal accounting consultants and have a lot of experience working with municipalities of all sizes and different audit firms including ours.
We have been working with the new municipal consultant along as has the former municipal accounting consultant to identify the areas where the City has concerns and to provide information that would clarify the situation. We would ask that before additional misinformation is promulgated throughout the community that additional sources be contacted to confirm the situation and the representations that have been made rather than take the misleading information that is circulating as propaganda as absolute truth."