Cortez City Council accepted the results of an independent audit into the city’ s 2016 finances Tuesday night, allowing Cortez to move one small step closer to financial normality.
The city has been behind on its financial audits since officials in 2019 discovered that a faulty software conversion in 2016 led to inadequate financial documentation, preventing Cortez from receiving proper audits for the previous three years.
The backlog of audits means that property taxes have been withheld, and the city hasn’t been able to apply for grants from the Colorado Department of Local Affairs.
The city was working to fix the situation, and the 2016 financial audit was nearly completed, until the process was suddenly halted after it was discovered that then-city finance director Katheryn Moss had been embezzling from the city for roughly three years.
A Colorado Bureau of Investigation probe into the embezzlement further set back the audits, since CBI told Cortez to stop cleaning its accounts until its investigation was finished.
Moss later pleaded guilty to a Class 5 felony charge of embezzling $63,642 from the city between Jan. 1, 2016, and Dec. 31, 2018.
City Manager John Dougherty was pleased with the results of the 2016 audit.
“I was actually kind of surprised that it came out better than I had anticipated,” Dougherty said. “With the fraud and the issues that we had, the auditors are satisfied that we’ve taken care of them.”
The 2016 audit was done by Mayberry & Associates, an accounting firm based out of Englewood, Colorado. Dougherty confirmed that the city will hire a new firm to handle its next audits.
The city also will interview new candidates for the position of finance director after Ben Burkett resigned at the end of last year to return to the private sector.
Work on the 2017 audit is underway, and Dougherty is confident that the 2018 and 2019 audits can be finished more quickly. Until Cortez catches up with its audits, the state will continue to direct the county to not relinquish the property taxes. According to Dougherty, as much as $250,000 in property taxes going back to at least 2018 could be waiting to be released.
Cortez has been unable to apply for Department of Local Affairs grants for roughly two years.
Mayor Mike Lavey was relieved that the city finally finished with the 2016 audit.
“It’s been a long road,” Lavey said. “This has restricted our abilities to get important grants. I’m glad we got this done and can finally start moving on.”
