Parks financials a puddle of muddle

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Since 2019 the public has been speaking out about the state of Eureka Springs Parks finances. In an effort to stop-gap the problem, the commission hired Windle & Associates to produce the Parks’ first and second quarter financial statements for 2020 based on general ledger entries made by various unnamed staff.

In an August 2020 workshop with Parks, Eureka Springs city council questioned Director Justin Huss about the overdue first and second quarter financial reports, and he said that the second quarter report was almost ready for commissioners’ approval. Arkansas Code states, “commissioners shall submit quarterly reports… each three (3) months… to the mayor and city council …”

Now, with the third quarter of 2020 drawing to a close, no quarterly reports have been submitted. In separate analyses, the Independent and Parks advocate Pat Costner identified significant errors involving the ¼ percent sales tax for general use and the 1/8 percent sales tax restricted to use according to the Lake Leatherwood Master Plan.

Costner found the first quarterly report prepared by Windle & Associates (W&A) does not acknowledge the 1/8 percent sales tax. Instead, total incomes from the 1/8 percent tax and ¼ percent tax were combined and reported as ¼ percent tax income.

Although Parks approved this report in July, W&A prepared a revised first quarter report in August. ESI found that the total 1/8 percent tax income shown in the revised report is $12,918.91 less than the total posted in the Parks ledger, and the total income from the ¼ percent tax is $12,918.91, higher than shown in the ledger.

In the revised report, W&A did not include the 1/8 percent tax income for January 2020 in the total income for the tax, and instead added that $12,918.91 to the ¼ percent general use sales tax revenue. This misallocation of the January 1/8 percent tax income was carried forward into the second quarter report and has not yet been corrected.

According to a W&A invoice dated Feb. 22, 2020, they billed Parks $7,557.50 with a discount of $2,500, totaling $5,057.50. At the Sept. 1 meeting, commissioner Christian Super shared that his experience with Windle & Associates was not great, saying “I’m not particularly fond of continuing the engagement…” and commissioner Scott Bardin said, “We are still dealing with something we could have dealt with ten months ago. Now we are no better off than what we really were.”

In last week’s meeting, Huss claimed that in the autumn of 2019 his financial responsibilities to the organization were stripped by the commission. Huss accused the commission of having no follow-through or any communication to correct or improve the financial processes.

For almost a year neither Huss nor the commission had revealed this alleged sanction. Commission Secretary Dave Hartmann refuted Huss’s claim saying, “I’m not sure where that ever happened… there’s never, to my recollection, any motion saying we’re removing financial responsibilities from Justin or the director.”

Hartmann said the commission was unhappy with the financial reporting they were getting from staff but did not remove Huss’s authority. 

Hartmann stood by the Parks Policy Manual, which states in section 201.5 that the Director shall create, or cause to be created, a quarterly financial statement of the commission’s finances. 

Huss insisted, “Last fall this commission removed the financial reporting and financial management duties from my job.” He went further and publicly posted his statement on the Parks website saying, “This was based on current investigations, but also included accusations including, but not limited to, my writing myself a counter check for $18k.”

When ESI asked Chair Ruth Hager for a response to whether or not the director’s financial duties were sanctioned by her commission she replied on Sept. 6, “I don’t know the answer, yet. I am still looking into the details, myself.”

During the Jan. 21 meeting, a motion was made by Bardin to remove Huss from the signature card, removing his authority to sign checks. The motion failed.