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Originally published Monday, December 2, 2013 at 7:50 PM

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State auditor slams Gold Bar for fast-and-loose finances

The small town of Gold Bar is in trouble with the state Auditor’s Office for lax financial procedures and spending more than it brought in.

Seattle Times staff reporter

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The beleaguered city of Gold Bar is in trouble with the state Auditor’s Office again for lax financial procedures and spending more than it brought in for three of the past four years. The city of 2,000 has only enough in its emergency fund to cover 1.5 days of general-fund expenditures, and it owes its water utility $80,000.

In its third straight negative annual audit, the auditor criticized the city for loose financial policies. The audit says the city’s travel policy doesn’t require receipts, and it keeps its city credit cards in an unlocked safe “where all employees have access and can self-check-out by use of a logbook.” City fuel cards are in envelopes with the PIN on the outside. The petty-cash drawer is unlocked and, at the time of the audit, short $145.

There is no purchase-order process, and council expenditures are approved by a panel of one council member and two residents who don’t consider the city’s current policies, the auditor wrote.

The picturesque town on Highway 2 is a hotbed of political harassment and mudslinging. The city administration blames financial problems on legal bills — $139,713 between 2011 and July 2013, the cost of defending itself against local lawyer and vitriolic blogger Anne Block. Since 2008, two city employees have been investigated for embezzlement.

Still, outgoing Mayor Joe Beavers said he disagreed with almost everything in the auditor’s report. The city’s money is safe, he said. After seeing the report, they moved cash and credit cards “to an undisclosed location, into a locked cabinet,” he wrote in his response. “For the past two years, the city has had more critical priorities than the updating of old ordinances and procedures.”

Beavers has said the city is in danger of having to disband if it can’t get its finances in order. A levy to help pay legal bills failed in 2012.

“What they really wanted was multiple layers of oversight, which, I’m sorry, we just don’t have,” he said, noting the city can afford only a part-time bookkeeper. “All of their stuff I thought was petty.”

The Gold Bar City Council has struggled to keep five members, but tomorrow will be full when newcomer Thomas Palmer is sworn in. He and two incumbents ran unopposed in the election.

A new mayor, Linda Loen, was elected last month and takes office the first of the year.

Emily Heffter: 206-464-8246 or On Twitter: @EmilyHeffter

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