City requires easier access to financial records of organizations it funds

Revisions made to 2016 agreements with outside, city-funded agencies, including nonprofits, will allow for easier city access to the agencies’ financial records.

Dozens of Lawrence social service agencies, vendor services and economic development organizations, all of which receive some city funding, will be asked to sign an agreement stating they will “promptly” make their records, employees and property available to the city, city auditor or any authorized representative of the city upon request.

The organizations will also be required to keep their financial records — and other records related to the city funding — for a minimum of three years.

The new language is part of an agreement that outlines how the outside agencies will use city funds. Agreements are signed annually by organizations such as the Lawrence chamber of commerce, Lawrence Arts Center and Big Brothers Big Sisters.

In previous agreements, the city did not require organizations to keep records for three years, and it wasn’t specified that city’s access to records included the city auditor.

The full text of the additional language is: “The Independent Agency will give the City, the City Auditor, or any authorized representatives of the City access to and the right to examine all records related to the expenditure of City funds.

The Agency shall keep financial records and all other records pertaining to this project being funded for a minimum of three (3) years. The City may, at its sole option, conduct an audit related to this funding agreement. The Independent Agency shall, upon City’s request, make its records, employees, and property available promptly.”

The Lawrence City Commission approved the change on Dec. 15 at the recommendation of City Auditor Michael Eglinski. Eglinksi was tasked with doing a performance audit on the Lawrence Community Shelter this year after the shelter reported a revenue shortfall and received $100,000 in emergency funds from Lawrence and Douglas County.

Kevyn Gero, a management assistant with the city, said she thought it was the first instance a city auditor had completed a performance audit on a social service agency.

Eglinski told commissioners that he “didn’t have any problem with having access” to the shelter’s records but that his ability to access them wasn’t clearly outlined.

Gero said it’s not the city’s intention with the change to regularly or randomly audit the agencies. The City Commission is responsible for directing city audits, she said.

“Previously, it said just the city has access to financial records, and we wanted to include that ‘city’ means the city auditor or any other authorized person,” Gero said. “We’re just giving people a heads up, so they would be aware of that.”

In response to Eglinski’s recommendation, interim City Manager Diane Stoddard said the revision would “increase transparency and will help to ensure that performance audits in the future will not be hampered by access issues.”

Pat Roach Smith, chief operating officer for Bert Nash Community Mental health Center, said, though she hasn’t yet seen the new agreement, she would welcome any additional oversight. Bert Nash is slated to receive approximately $178,000 from the city in 2016 for its homeless outreach team and $350,000 for its WRAP program.

“For me, I would rather have people ask me questions and make sure I’m doing things appropriately than to find out later that I’ve not been doing it right and for it to be a big problem,” she said. “I don’t see a problem with it. I think funders have every right to ask for accountability and have a professional accountability process.”

Colby Wilson, executive director of Boys & Girls Club of Lawrence, felt the same. The Boys & Girls Club chapter requested approximately $150,000 from the city for 2016.

“We welcome any oversight,” he said. “We understand that the money needs to be well-invested in programs that work. We’re happy to do whatever it takes to let people know we’re doing what we said we’re going to do with the money.”