FJBC under deadline to recoup loss
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ST. IGNATIUS – About a month after an internal investigation began into Flathead Joint Board of Control missing monies, the board said the Federal Bureau of Investigation has stepped in to take over.
The FJBC is comprised of 11 members and one additional member at large to represent irrigators within the Mission, Jocko and Flathead districts. FJBC Chairman Ray Swenson said he hasn’t ever dealt with the FBI, so he isn’t sure how things will proceed. “All I can say is that they are handling it,” he said.
John P. Russell of the FBI stated in an email that the bureau has no comment or information pertaining to this situation at this time.
The issue started in April when it was discovered by board members that discrepancies were occurring with the board’s funds. The majority of the board then voted to hire an independent group to take a look into the operations, procedures, and accounting for the last three years, from 2014 to 2016.
Anderson ZurMuehlen’s Jane Schweitzer was hired as an independent source to research the matter. According to the board, Schweitzer found some problems. People that have read her initial report stated that about $200,000 is missing from the books, but documents verifying that amount haven’t yet been released.
The board decided to go deeper into the investigation to get an exact number with the help of Lake County Attorney Steve Eschenbacher, so they voted to turn over the investigation and all documents to the county at the May 5 meeting. FJBC attorney Bruce Fredrickson said at that meeting that the initial investigation raised questions that the board doesn’t have answers to without going through a forensic audit or an attorney investigation.
On Friday, May 26, Chairman Swenson said in a phone interview that the FBI has more resources to handle an extensive investigation than the county. He isn’t sure if the county asked for the FBI’s help or if the bureau decided to investigate the matter independently. Lake County Attorney Steve Eschenbacher wasn’t available for comment.
Chairman Swenson said the board held a special meeting on Wednesday, May 24, to deal with issues connected to the investigation. He said the board is under pressure from the insurance company to figure out exactly how much money is missing from the books and make a claim. “They gave us 120 days to get that done and we are almost thirty days in,” he said.
Swenson said the board didn’t figure the FBI would be done with their investigation within the insurance company’s timeframe, so they voted to hire Schweitzer to continue her investigation.
FJBC Treasurer Gene Posivio said the investigation shouldn’t cost more than $50,000. He said the investigation is needed to make a claim with the insurance company and recoup the funds.
Chairman Swenson said the board was insured for $100,000 with additional coverage up to $500,000. He said the insurance company will also pay for up to $5,000 of the forensic audit, done by Schweitzer.
The board is preparing for the FBI’s investigation by purchasing a new computer. They anticipate that the current one will be taken as evidence. The board voted to approve the purchase.
Swenson said protective measures are being added to the board’s financial system including outsourcing regular accounting work. “We want more eyes on the money,” he said. The board is also requiring dual signatures from each district to authorize any checks. He said all credit cards were also canceled.
The board voted to dismiss Executive Manager Johanna Clark during the meeting. She was placed on leave without pay or benefits during the May 5 meeting after the board was informed of missing monies during the initial investigation. Clark hasn’t been charged in the matter and couldn’t be reached for comment.
In other news, Ted Hein retains his position on the board as the member at large. He received the majority vote from the board during the meeting. The board also approved Kurt Hafferman’s contract. He was hired to work on the water rights adjudication process before the issue goes to Water Court. The state is requiring that all issues concerning water rights claims be addressed before they make a final ruling in 2018.
