The employment of Tahlequah City Administrator Edward Carr was terminated during a Sept. 3 City Council meeting, and records show the action was taken for "legal cause."

According to the termination letter written by Mayor Sue Catron, specific reasons for Carr's dismissal was lack of awareness about city finances and failure to follow the direction of the mayor and/or council.

Catron declined to comment when asked for specifics on what Carr did, or what orders did he not follow. She said that was between the city and Carr.

Other concerns were that Carr did not encumber funds as required by state law, and that he failed as a leader.

Catron was asked why, if Carr hadn't been encumbering properly, his lack of action had not be caught during the audit. She said that to encumber funds, money is earmarked for commitments so someone won't try to spend the same revenue multiple times.

"It puts a hold, if you will, on the budget in the amount of the obligation. So for instance, if the City Council approves repair to a street and they review bids and authorize the work to proceed, before work begins, an encumbrance for the full amount that has been approved should be entered," said Catron.

That would ensure there is a budget available and that the money won't accidentally be spent more than once as work proceeds.

Michael Green, who has performed the city's audit in previous years, presented the board with a 57-page report back in June. Green is a certified public accountant who was hired in January, and he found the city had violated deadline requirements. The state of Oklahoma requires an annual audit report to be filed within six months of the year's end.

However, Green also said he did not see any discrepancies that would make him believe the numbers were not presented fairly.

"This is a clean audited opinion, so there were no material misstatements in here," he said.

The mayor said the auditor assesses the level of risk for misstatement and designs tests of specific transactions to determine if there are concerns.

"To test for a systemic failure to encumber, the auditor would typically select some samples from invoices paid after the end of the fiscal year and check to see if they are properly encumbered prior to the end of the year," said Catron.

During an Aug. 20 City Council meeting, the board agreed to hire Arledge & Associates to conduct a forensic review and analyze the city's financial records, and to conduct an audit for fiscal year 2019-2020.

"I do not know how large the audit sample related to encumbrances may have been or whether non-material errors were found," said the mayor.

She said the city's Purchasing Department has written procedures regarding encumbering money. The language hasn't been updated since 2007, but the requirements and process have not changed significantly, she said.

In August, Carr was placed on paid administrative leave until the City Council reviewed his employment contract, which included an annual salary of $117,000 plus benefits.

As of now, City Finance Director Danya Curtis is still on paid leave while an investigation into the city's finances is conducted.

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