Promises to the State Auditor that an audit committee would provide enhanced financial oversight were broken. The Fort Worden Public Development Authority’s audit committee was not formally created until earlier this year, and it has rarely met. Even after revelations of irregularities and malfeasance that threaten the organization’s future, the audit committee has canceled its next scheduled meeting.
The Fort Worden PDA has never received a clean state audit. Every review by the State Auditor has found significant problems, ranging from misstating millions of dollars of debt as income to addition and subtraction errors. The response from the PDA has been that it would provide more training and resources to its financial team and that the PDA Board would form an audit committee to ensure that the problems were not repeated.
See Port Townsend Free Press, November 6, 2020, “Fort Worden PDA Finances Plagued with Problems from Beginning” [Photo above: the current condition of Ft. Worden’s $2 million glamping project]
The State Auditor in February 2017 released adverse findings in its audit of the PDA’s first two years of full operation, 2014 and 2015. There was no audit for 2016 yet because the PDA was over a year and a half behind in getting that year’s information information to the State Auditor.
In response to the adverse findings, the PDA pledged that it was “implementing procedures to ensure internal controls are put in place and adhere[d] to in order to address this finding….” The PDA stated that this action was “our priority.” Further, the PDA said that it “has also established an Audit Committee to oversee future annual reporting as an extra measure to make sure accurate reporting takes place.” The State Auditor recommended strongly that staff receive the training and resources needed to do their job of preparing accurate accounts. The PDA pledged this would be done.
Yet, in the Executive Committee meeting discussing the findings by the State Auditor there was no discussion of these pledges and no motion by any Board member nor suggestion by staff to act upon those pledges. Instead, the Board and staff quibbled with and reframed the Auditor’s negative audit to minimize its significance. The minutes of that February 23. 2017 Executive Committee meeting may be read at this link. Indeed, David Robison, the executive director at the time–who held the position for nine years until November 2020–saw the negative audit as a positive reflection on the job his staff was doing.
By the time of this discussion, the PDA had been in existence for seven years.
A review of the Board’s meeting minutes for all of 2017 shows no other discussion of the adverse State Audit, nor any action to create the promised audit committee and provide the enhanced staff training and resources strongly recommended by the State Auditor.
The next two years passed without discussion or action by the PDA Board to prevent a repeat of the negative audits for 2014 and 2015. No audit committee was formed. There was no action on upgrading the skills and resources of PDA’s accounting staff.
In February 2020, the State Auditor released negative audits for PDA’s 2016 and 2017 financial statements. In addition to submitting its 2016 data late, the PDA also was six months late in getting its 2017 financials completed and delivered to the State Auditor. Again, the State Auditor could not give the PDA a clean audit. It found $3.5 million in debt that was not reported, mathematical errors, and operating expenses and liabilities misstated for both years, among other problems. “Internal controls over financial statement preparation,” the Auditor stated, “were inadequate to ensure accurate and complete reporting.” Again the Auditor recommended that the PDA’s staff receive the training needed to do their job right. Again, the PDA told the State Auditor that it was forming an audit committee. “The Committee,” the PDA wrote in its response to the Auditor’s findings, “will perform regular review of internal financial controls, process and policies.”
Finally, at its February 26, 2020 meeting the Board took up a motion to create the audit committee. In discussion of the motion, Treasurer Jeffery Jackson claimed that the Executive Committee “has historically served as an audit committee.” {A review of all the minutes of the meetings of the Executive Committee, however, does not show that body undertaking any of the actions normally undertaken by corporate audit committees. They reflect no oversight of financial reporting or internal controls nor participation in the preparations for the state audits.) The motion passed unanimously. An “Ad Hoc Audit and Finance Committee” was born.
It did not meet until April 16. Its first agenda item was a review of financial reports presented by staff. There was no discussion of improving the inadequate financial controls which had led to four previous adverse audits by the State Auditor. There was no discussion of staffing needs or training the PDA’s accounting team. The balance of the meeting was about operations, cash flow requirements and projections, and recovering from the Governor’s lock down order. There was a discussion towards the end about the Auditor’s position that the Fort Worden Foundation, a related charitable fundraising group, should be included in the PDA’s financial reports. That was it as far as it went in responding to any of the State Auditor’s concerns.
Two months went by without another meeting of the audit committee. At its June 18 meeting there was no discussion of anything related to the problems identified by the State Auditor. All discussion was focused on budget scenarios, cash flow and the impact of the Governor’s COVID lock down orders.
The July meeting of the audit committee was canceled.
The August meeting of the audit committee was canceled.
No meeting was scheduled for September.
The October meeting was canceled.
On October 28, 2020 Acting Executive Director David Timmons reported alarming discoveries in the PDA’s financial picture. He found irregularities, malfeasance and other problems so severe they rendered the PDA’s finances “a house of cards.” Board members responded with surprise and concern. One Board member said she was “stunned.” See Port Townsend Free Press’s 11/5/20 report.
Despite the PDA’s precarious situation, the Ad Hoc Audit and Financial Committee has canceled its November meeting. No meeting for December is currently scheduled.
Related: “Fort Worden Glamping a Soggy Mess,” PTFP, 11/14/20
Jim Scarantino was the editor and founder of Port Townsend Free Press. He is happy in his new role as just a contributor writing on topics of concern to him. He spent the first 25 years of his professional life as a trial attorney, then launched an online investigative news website that broke several national stories. He is also the author of three crime novels. He resides in Jefferson County. See our “About” page for more information.
Thanks Jim once again for your expertise and time. Deleted comments in the PT Leader from 2012 reveal public concerns that turned out to be very valid. They were so right on that they were a threat, and deleted. I kept copies of the story and comments. Anyone interested can get 2 word docs emailed to them. The PT Leader is silent and has not restored the comments. Get your copies from harvey@forestgems.com
I will not ever disclose who asks for these documents. The comments are very relevant as the State continues to allow the same players to keep playing with public assets. What was true then is true now. It is time for a reset.
Thank you, Jim, for the work you put into this article. Fort Worden has rental units including rooms, apartments and houses that mostly sit empty during the winter. I and others have previously suggested that the local homeless be housed in these units during the winter until late spring providing time for cleanup and preparation for the use by tourists. PDA folk have rejected any such use in the past, but it seems to me they need to get off their high horse about “undesirables” and recognize that most of the the homeless have some source of income [social security disability minimum is slightly above $800 per month, with an expectation that they will pay 30% toward housing expenses, for example], income that could be supplemented by the various homeless funds available. See https://fortworden.org/book-your-stay/ . This might demonstrate that Fort Worden has value to the wider Jefferson County community when it finally comes time for someone in authority [state auditor?, attorney general?, PDA creditors?] to take action and a more financially responsible, less elitist organization takes over running the Fort.
Joan Best
Joan-
Somewhere in documents I have it shows that the takeover by the FWPDA started with the State Attorney General. Someone needs to look at what happened. Probably the same institutions that caused the problems are not the best to self assess. Someone who was on the Fort Worden Advisory Council (pre FWPDA) became a Parks Commissioner, please correct me if I am wrong. The end result was pre determined and other options were not allowed to be explored. Time for that exploration now that we see the fruits of what was allowed, and not stopped by State Audits. My whistle blower cop friend was sent back to those he was blowing the whistle on, similar to my experience at Pike Place with the Attorney General at the time and the PDA there. My friends life was ruined and he was made an example of. You would shudder to know what he does.
Harvey,
There is a lot going on right now that makes me shudder.
My three year stint on the FW advisory board is just finishing. I got the gig by answering a notice in the Leader of its opening so I know probably less than you about the origins of the advisory board or the PDA except I was informed the PDA took over all real authority once they got started. The advisory board meets, listens to presentations by groups using the Fort and sometimes others with ideas. As far as I was able to discern nothing actually manifests from the discussions. I made two proposal presentations: 1. Using the Fort as a base for mountain climbing training such as Olympic College had for many years, once led by, among others, Chuck Maiden of Chimacum [now deceased] and 2. Improving disability access to the Fort with several pages of specific suggestions. I was met with polite skepticism concerning the first with not one inkling of interest or followup, and praise regarding the second and references to my documentation as one of the groups accomplishments, although none of the suggestions were ever implemented, not even the easy ones like the sign I proposed be placed where the sidewalk meets the road in front of the military museum explaining how to find the handicap entrance at the back of the building.
The advisory board just listened, via zoom, to a presentation yesterday by the PDA folk about their woes, with the advisory board leaders offering their help, but with no suggestions. That presentation should be online soon.
Regarding the AG’s involvement in the financial woes of PDA, Bob Ferguson seems to be more than competent at successfully going after wrongdoing within the state and nationally. I suspect he will, and I believe he should get involved with the malfeasance with the PDA funding after it has been disclosed to him by the state auditor. For the city of PT and Jefferson Co to not refer the matter to the AG immediately would appear to me to make them rightfully appear as incompetent overseers. There are nominal members of both boards on the FW advisory board, although Kate Dean has never attended, the city has been represented as well as the port and PT schools. If the local governments do not act to inform and follow through they may lose any joint power they now have regarding Fort Worden activities. Presently, it seems to me, the dereliction of duty lies with the state auditor, but the walls are crumbling and the state surely will act, AG, governor, someone. There is just too much money and too much really bad judgment for the state not to act.
Joan Best
Thanks for your time on the advisory board Joan. You really can’t separate the City of PT from the FWPDA. The revolving door with 20 year City Manager Timmons now at the helm of the FWPDA doing damage control caused by past fired city employee Robeson, who he has known for years, is inappropriate. I know Timmons was called in months ago to look into grants etc Robeson didn’t have the expertise to navigate. The idea that he suddenly discovered problems recently is questionable, as is Robeson’s sudden retirement and silence.
My whistle blower detective friend who went to state level and even FBI has a different spin on Frerguson than you. I have always encountered the reality that the folks who cause problems will never fix them at the peril of admitting incompetence. The State will surely cover the States behind. Taking action yesterday is the best course. Get the City of Port Townsend out of Fort Worden for the sake of all who value what the Fort represents to so many volunteers over the years. They are good folk, like yourself. You speak up. Rare bird. Thanks.
I absolutely agree with you that the State is the responsible party, having given the keys to the car to the FWPDA and doing nothing as it repeatedly drove Fort Worden into the ditch, year after year, audit after audit. Many saw the car going over the cliff as inevitable.
This was absolutely predicted in the missing leader comments, which were from very thoughtful and insightful members of the public. We do need to look forward, but all the concerns from 2012 are relevant right now.
Get your deleted by the Leader copies of what the owners of Fort Worden said back then. Same dynamics today with concerns proven valid. harvey@forestgems.com It is a road map of what and who to avoid with the reset that anyone but a few can plainly see is needed.
In 2012 the State went ahead with the only plan they allowed, ignoring warnings. Today the public needs to stand even more firmly to get State Parks back in total control of Fort Worden, and make the FWPDA a bad learning experience in our rear view mirror.
Local egos don’t want that. Local egos have City problems they have created to deal with, and won’t. Connecting the dots on all the problems gives a clear picture.
Grants and even private money to turn the campus into a place for all of us down to the least of us, are more likely than bailing out elite ideas and players.
Change the charter back to allow affordable housing and require those receiving that housing to pay it forward with volunteer time. I favor vets and the elderly, some in need are both. Most have lots to add to the mix if allowed. Makers place is based on my proposal back in 2012 that I called the Crossroads, where many types could cross paths and learn from each other. With some work it could be quite a local asset. Not so with the FWPDA controlling it.
Sure would like to get Jim in touch with my friend the whistle blower. He knows how the system really works. It didn’t for him.
It strikles me that letting the homeless into Ft. Wordern would be a double edged sword. There are good homeless people who could live in the buildings and not cause a problem. But, what would happen when the other “homeles” decided to encamp. You would end up with a Parade Field that would rival the situation at the Fair Grounds. Once encamped, they would be hard to move out when the tourist season started. Ft. Worden would become very undesiraable for families to vacation. Hopefully the State would monitor the Park and stop the undesireables who might try to move in. The question is would they?
How something is administrated is dependent on the administrators. Nothing should be free. Low cost for those who qualify, Fort Worden should be a place for Vets to find sanctuary as well as others who can maintain their space and contribute. There are no squatters now. Properly administrated there should be none with low cost temporary housing. Problem makers should not drag all down with them. Lots of planning and research needs to be done. If there is a will and competence it seems some sort of manifestation helping out those in need who need a hand and not a free ride should be able to be accomplished. Not easy. The best things never are. Fort Worden for only the elite seems to be contrary to what Fort Worden represents to many volunteers and others. Somewhere there are aging and frightened people in need of help. Somewhere is here.
Anyone applying to rent at the Fort would go through the same vetting process as any other prospective tenants applying to landlords and agencies. The fairground folk, are a mixed bag. The ones that cause the problems, are only the ugly tip of the iceberg of the local homeless. Most who cannot find adequate housing here would be normal tenants. I personally know several people who are low income and can afford to pay an amount that would have been considered “reasonable” a year or two ago in the 350 to 500 range. We have quite a few locals who work at minimum wage jobs, including a lot of people in their 20s and 30s. I have an ADU as part of my home. Whenever I advertise it I get about 20+ applicants looking in the price range of 400-850. There is almost nothing available in that price range in PT. Some of these people drive from out of county to go to work in PT. Some couch surf. Some camp out. I suspect that some of them are living in their cars, and some may end up at the fairgrounds. The Fort, other local state parks, and the Port allow people with RVs to stay in their local RV campgrounds for the winter months on a month to month fee basis, although their rates are pretty high. See https://portofpt.com/wp-content/uploads/2020-Rates-Pt.Hudson.pdf and https://parks.state.wa.us/DocumentCenter/View/13580/2020-Camping-Fees-PDF?bidId= The Washington State Parks have a maximum stay: “From April 1 through Sept. 30, the maximum length of stay for the entire camping party in any one park is 10 days. From Oct. 1 through March 31, the maximum stay for the entire camping party is 20 days.” Some people who own RVs or live in their cars move from campground to campground. Some get lucky and get the gig of hosts and can stay longer. Neither Jefferson Co or Port Townsend permit the creation of new campgrounds for year-round renters, nor do they permit an individual to purchase a lot and live on it in an RV unless the wheels are removed and a foundation is put in. One member of the current city council explained to me that they didn’t want to “ghettoize” a location in PT by allowing RVs.