James Pilcher

jpilcher@enquirer.com

Scroll to the bottom to see the full copy of the state auditor's letter to the city.

The annual state audit of Cincinnati's finances and operations comes down hard on the city's Parks Department, stating current practices or lack thereof "increases the risk that errors, theft and fraud could occur."

Among the findings:

The Parks Department used privately endowed money for salary bonuses and car allowances.

Documentation is missing for thousands of dollars in credit card charges and hundreds of dollars in gift card use. In fact, someone redeemed points on one of those cards for a $100 gift card, but there was no record where that gift card went.

Parks officials allowed interest to accrue on those credit cards, which is considered a no-no for public agencies. The Park Board had denied previously to The Enquirer that this was occurring on credit cards used by the top two parks leaders, Willie Carden and Marijane Klug.

Questionable spending took place on purposes including lobbyists, iTunes charges and floral arrangements for board members on baseball's Opening Day.

Parks officials fail at the most basic level of government budgeting by not preparing "a comprehensive budget of all sources of anticipated revenues and expenditures."

Perhaps most importantly, the state auditor recommended the Parks Board implement the changes recommended by a city audit of the agency last year, which came after finance questions previously reported by The Enquirer. The proposed changes include running all parks expenses through the city's procurement system and building in tighter accounting controls.

But parks officials balked, saying they alone have control of endowment dollars donated or bequeathed to the department by private citizens, even though the monies are considered public under state law. Parks officials and board members have resisted those changes to the point of hiring their own separate lawyer, which has become a bone of contention with the city solicitor's office.

"We recommend that the City continue this process to ensure that Park Board financial practices are in conformity with applicable laws and to promote transparency and accountability of Park Board finances," state auditor David Yost wrote in a letter accompanying the audit that was obtained by The Enquirer.

The findings come as the Ohio Ethics Commission is conducting an investigation into parks director Carden and financial services manager Klug, as reported by The Enquirer Sunday.

It's the second time the duo has come under the commission's scrutiny. It's not clear if the probe involves new allegations or is a reopening of the earlier case against Carden and Klug involving improper payments made to them through the separate nonprofit Parks Foundation. State law prohibits public officials from accepting money from private sources.

Carden did not return phone messages or emails seeking comment Wednesday night. He declined comment on the audit and the ethics investigation after Thursday morning's Park Board meeting.

Park Board chairwoman Dianne Rosenberg declined comment Wednesday evening, saying she had not seen the auditor's report.

Carden reports to the five-member Parks Board, which is appointed separately by the mayor and alone has the ability to hire or fire parks executives. Carden is scheduled to retire later this year.

Officials with Cincinnati City Manager Harry Black's office also declined comment, saying the audit's findings will go to City Council's budget committee over the next two weeks.

A representative for Mayor John Cranley did not return a message seeking comment.

Cranley recently appointed two new members to the board after former chairman Otto Budig Jr. and vice chair Merri Gaither resigned three months ago as the impasse between the board and the city widened. (The two new appointees will attend their first board meeting Thursday morning).

Earlier this week, however, Cranley spokeswoman Holly Stutz Smith said changes needed to be made.

"The mayor and his most recent appointees believe that implementing the reforms recommended by the audit is an urgent matter to maintain the public trust in our parks department, which, despite the need for reform, is a great asset to our community," Smith said in an email. "The parks department is a public body under state law and all of its money is public money that needs to be accounted for publicly and transparently."

City Councilwoman and mayoral candidate Yvette Simpson said Thursday that the board does "have challenges ... and they haven't shied away from working on those."

Still, Simpson said the board should be able to operate independently, including the ability to hire its own lawyer outside the city solicitor's office.

"The mayor nor anyone else should be allowed to use political pressure to gain access to funds or functions that should be controlled by this independent board," Simpson said. "There is a reason they are independent like that."

The tensions between the city and the Parks Board started shortly after the arrival of a separate internal city audit in the summer of 2016. Cranley had ordered the audit in autumn 2015 after The Enquirer reported on questionable expenses and practices at the Parks Department. That came as Cranley and parks officials were seeking a new tax levy to help raise funds to repair some of the older parks in the city.

Voters soundly overturned that effort in November 2015.

Editor's Note: An earlier version of this story was edited to correct the spelling of Marijane Klug's name.

City of Cincinnati 16-Hamilton ML (1)