Mayor questions auditor's authority on Lincoln arena

During his monthly appearance on a radio talk show Wednesday, Beutler questioned Foley's intent and authority to do a financial audit of the recently approved project.

The mayor said he has asked the city attorney to look into the legality of Foley's move and explore "what our options are" -- saying one move would be to go to the Legislature to clarify Foley's responsibilities.

"What Mr. Foley seems to be suggesting here is that we should be forced to use him to do an annual audit, and I don't think that's the business of the state auditor's office," he said on the radio show. "That's just more big government from my point of view."

Beutler said when Foley notified him of his intent to audit the arena project at the end of its first fiscal year, he indicated he intended to do the audit annually.

Foley says he intends to do one audit and if the books are in order, that could be it.

Beutler said that would duplicate the city's planned annual audits of the project by a private firm.

But state audits are more thorough, Foley said. Conventional financial audits give an opinion on an entity's financial statements, not whether the money is being spent appropriately.

"We dig deeper -- a lot deeper -- and we find things that typical CPA firms don't find," Foley said.

Lincoln's Antelope Valley Project balance sheets were independently audited annually, too, but no problems were discovered until Foley audited the project.

Beutler said the city's audit board could periodically do audits, too. The volunteer audit board can hire companies to do audits at the Lincoln City Council's direction, but the board has gotten only one assignment from the council since it was created two years ago.

Foley has said the city's audit board should not oversee this audit because it is chaired by a university employee and has members who could get arena contracts.

Beutler implied Foley might be politically motivated. Foley is up for re-election this November but is running unopposed.

"There are all kinds of conflicts of interest out there and they're not all monetary in nature. Some of them, for example, are political in nature," Beutler said. "How are we to assume that Mr. Foley's office is any more independent of meaningful conflicts than the audit board?"

The mayor said the annual audit is normally done by a private CPA firm and the state auditor's office usually comes in if there's a complaint or concern.

The joint public agency created to oversee the financing and construction of the arena will bear the cost of Foley's audit, as is the case with all entities Foley audits.

Foley would be "competing with private enterprise," Beutler said, and the arena is "not the business of the state."

The mayor said Foley's office is supposed to periodically double-check private audits and help smaller, unorganized towns and villages that don't have their own auditor.

"I don't believe that the Legislature ever intended, except when a city wanted it or requested it, that the state auditor would impose themselves on a local political subdivision to do the regular business of auditing," Beutler said.

But Foley said he goes into plenty of cities without an invitation -- locally, he has examined Wyuka Cemetery and Lancaster Manor.

"Nobody files their tax return and invites the IRS to audit it," Foley said.

Foley recently informed Omaha Mayor Jim Suttle of his intent to send auditors to the Omaha Fire Department and Suttle "didn't have any heartburn" about it, he said.

Foley has said when he called Beutler to inform him of his intent to audit the arena project, "I don't know if my phone call was the highlight of his day" but by the end of the conversation, Beutler said, "Go ahead."

But now Beutler has changed his tune. Foley wonders what he's worried about.

"If you play by the rules, it's not that difficult to spend public funds properly," he said.

Earlier this week, when the Journal Star reported on Foley's plans to audit the arena, Beutler responded to an interview request with a one sentence press statement saying ongoing audits are "appropriate and necessary" without commenting on Foley's audit.

Reach Deena Winter at 473-2642 or dwinter@journalstar.com.