Audit finds ‘improper’ expenses and bonuses under former Utah agriculture boss

Nov 19, 2020, 7:03 AM | Updated: Dec 8, 2020, 1:13 pm
utah agriculture audit...
(Utah Department of Agriculture and Food offices. Credit: Paul Nelson)
(Utah Department of Agriculture and Food offices. Credit: Paul Nelson)

SALT LAKE CITY – The state auditor says they’ve found major problems within the Utah Department of Agriculture and Food under the previous commissioner after an audit.  They’re releasing a scathing report, claiming money was mismanaged, funds were used for personal trips and state vehicles were used improperly. 

The audit began when the new agriculture commissioner, Logan Wilde, asked the Utah auditor’s office to look into complaints of mismanagement happening under the previous commissioner, Kerry Gibson.  Auditor John Dougall says they were getting complaints about inappropriate travel and questions about how certain cannabis growers got their licenses.  He says they weren’t focused on any specific individual and discovered several employees were engaging in questionable behavior.

Concerns Over Cannabis Grow Licenses

When UDAF was awarding grow licenses in the summer of 2019, a six-person review board looked over 80 applications.  Dougall says they noticed something odd when they looked over the scores each applicant was given.

He says, “We found some indications of possible collaboration among certain employees.”

The report shows two employees ranked seven of the applicants in the exact same order in their top-ten rankings.  A third employee gave similar scores, but not as closely related as the other two.  Plus, the rankings of three board members were changed, significantly, to more closely match the preferences of senior management officials in the department.  This led to three applicants getting licenses that they wouldn’t have received otherwise, according to the report.

Questionable Hires

The audit says two former employees, former Director of Operations Natalie Callahan and former Public Information Officer Sasha Seegmiller, both owned and operated a PR firm before and while they were employed with UDAF.  That firm reportedly worked with other government groups, political campaigns and with Gibson, himself, before he was appointed UDAF Commissioner.  Plus, the firm represented one person who later became a principal of a company that was awarded a cannabis grow license.

Dougall says these potential conflicts of interest were never disclosed, and the employees should have cut their ties with their PR firm, or they should have been let go from UDAF.

Also, auditors say one employee was hired to oversee financial operations, even though they might not have been qualified.

“There was a lack of consideration of other folks and insufficient skills of that individual, from our perspective,” Dougall says.

Inappropriate Travel Expenses and Reimbursements

The audit shows the former commissioner and former director attended a conference in Hawaii in July 2019, and both received upgrades in their travel accommodations.  The former commissioner reportedly bought an upgraded seat for the flight, and both stayed in upgraded rooms.

Auditors also say these employees asked to be reimbursed for purchases that were made on the state’s P-card, despite the fact that their policy prohibits them from doing that.

Dougall says some of these questionable payments may have been made intentionally, while others were done out of sloppiness by one of the department’s secretaries.

“Somebody would come off of traveling and would dump a bunch of receipts on her desk.  She would put together the travel reimbursement and there were mistakes in there, like things that had already been paid,” Dougall says.

Auditors also found many instances when people used state fleet vehicles for personal use, significant overtime claims without any justification and bonuses paid to employees after they were effectively terminated.  In one case, two employees went on a work trip while they had outside business interests.

“The client for the outside business interest thought they were working for them on the trip, but the department thought they were working for them.  So, clearly, there was confusion about who they were really working for,” Dougall says.

Wilde, the current Utah Department of Agriculture and Food Commissioner, issued a statement after the audit was released.  It reads…

“The Utah Department of Agriculture and Food (UDAF) takes the concerns raised in the Auditor’s report and the Department’s responsibility to address these concerns seriously. With regard to the awarding of cannabis cultivator licenses, in December of this year, the Department will be considering whether or not the license of each current cannabis cultivator shall be renewed. Pursuant to Utah Code Section 4-41a-203, the Department will hold a public meeting to consider the operations of each licensee and will not renew any license unless the requirements of Utah law and Department rules are being strictly followed. Additionally, the Department has asked a third party to review processes for potential irregularities. “

“The Department appreciates the time and effort by the Auditor’s Office in bringing the irregularities and issues to its attention so that UDAF can continue to take appropriate steps to address the concerns raised in the audit report. The Department is committed to moving forward expeditiously to improve internal policies and procedures in carrying out its mission to support agriculture, food safety, and to support producers throughout the state.”

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Audit finds ‘improper’ expenses and bonuses under former Utah agriculture boss