Washington State Auditors have found that nearly 1,500 dollars in scholarship money for the Palouse Empire Fair under previous management was misappropriated.
State auditors have determined that 1,350 dollars in fair royalty scholarship money was misappropriated in May of 2017. Investigators don’t know if there was additional misappropriation of money due to the lack of financial record keeping at the fair at the time. The state audit found that the checks were cashed but the funds weren’t deposited into Whitman County’s bank account.
The 3 employees who were managing the Palouse Empire Fair at the time all left their jobs 5 months later. Those departures included longtime fair manager Bob Reynolds who retired in October of 2017.
The Washington State Auditor’s Office fraud investigation followed up a county investigation which was sent to auditors in Olympia in February of last year.
Whitman County responded to the misappropriation finding noting that new administrative staff have been hired to run the fair. The new management has adopted and follows best practices to correct the internal financial issues.
A previous state auditor’s office report of the 2017 Palouse Empire Fair managed by Reynolds released in 2018 found extensive financial mismanagement. That report found that half of that year’s tickets were given away without any policy for complimentary passes. Documentation for 4% of ticket revenues were not maintained. The fair office failed to maintain documents for nearly 15,000 dollars in camping revenues. Money from pre-fair sales of carnival tickets wasn’t deposited with the county treasurer. Auditors also found a lack of documentation proving that all the fair vendors had fully paid the fees required in their contracts.
Reynolds retired as fair directed a few weeks after the 2017 fair which was the subject of the state audit. Whitman County Emergency Manager Bill Tensfeld was appointed by the county commissioners to add fair manager to his duties following Reynolds departure.