Prosecutor seeks review of Cave Springs finances

BENTONVILLE — Benton County prosecutor Nathan Smith has asked the Arkansas State Police to investigate financial wrongdoing in Cave Springs that was reported in a recent legislative audit.

“The audit uncovered the unauthorized overpayment of city officials, alleged misappropriation of city money, and other financial irregularities,” Smith wrote in a letter sent Thursday to Col. Bill Bryant, director of the state police. “After reviewing the audit, it is apparent to me that further investigation into these issues is warranted.”

Cave Springs Mayor Travis Lee did not return a phone call seeking comment. Kimberly Hutcheson, the city’s recordertreasurer, said she had no comment.

Justin Eichmann, city attorney, said Thursday that he and city officials are focused on getting items in the audit fixed.

“It’s a bad audit, but it’s important for the city to address and fix the problem,” Eichmann said.

Eichmann said his goal is to have a clean audit next year. City officials are working with David Williams, a retired auditor, Eichmann said.

The state legislative audit found that Cave Springs failed to meet the requirements of state law in 22 instances from 2015 through 2016.

The city put $ 61,307 from its street fund into the general fund in 2016, which breaks the law, according to the report released in late July. The city did the same thing with $ 19,709 the previous year, according to the audit.

The audit also found a number of expenses paid without proper authorization by the City Council, although the payments were not cited as failures to meet legal requirements.

For example, the city’s recordertreasurer was overpaid by $ 14,509 in 2016, the report found. Another such example stems from an April 12, 2016, city resolution that authorized the purchase of a vehicle for $ 23,165. The vehicle ordered, however, cost $ 33,655, which resulted in “a disbursement in excess of appropriation totaling $ 10,490,” the report says.

Most of the instances cited in the audit as noncompliance with state law involve record- keeping provisions. For example, the city made electronic payments without using a method approved by the Legislative Joint Auditing Committee, as required by law, the report says.

The mayor also hired attorneys without the required approval of the City Council, the audit said.

“The city paid a vendor $ 1,093 to set up a nonprofit organization, Friends of Cave Springs, for which the mayor, recorder- treasurer and a city employee were officers, in conflict with [ the] Arkansas Constitution, Article 12, Section 5,” the report said.