Tourism Department admits to illegal financial actions

Tourism Department Deputy Director Claudia Conner (left) and Executive Director Dick Dutton (Right) at a commission meeting which detailed financial problems uncovered at the agency (Phil Cross/KOKH)

The Oklahoma Department of Tourism admitted to violations of state law in how it handled taxpayer money. The director of the agency read a prepared statement to commissioners Wednesday morning at a regularly scheduled meeting.

Commissioners accepted the report presented by agency head Dick Dutton. Among the findings where issues that FOX 25 has been investigating for several months. Prior to today’s meeting the agency would only admit to FOX 25 that there were laws in place that governed how they were to spend money.

However, in the meeting Dutton admitted the agency had made illegal payments from the department’s clearing account. The clearing account is only to be used to move money from local bank accounts into the agency’s general fund, with a few exceptions. Tourism had used the account to make settlement payments to employees. This resulted in those payments being hidden from the agency’s general revenue accounting statements.

Dutton also confirmed that a previous financial officer had pre-signed checks and even emailed copies of the checks to other employees. Dutton says those checks have been voided and the accounts are being monitored.

The statement also included admissions of lax policies that may have contributed to the embezzlement of state funds from one of the state-run parks. That missing money led to a criminal case against the former employee. Dutton said he intentionally withheld information about the embezzlement from the commission to protect the criminal investigation. However, the criminal charges in that case were filed in February.

“We’ve discovered a huge education issue,” Dutton said about the numerous instances of state law and agency policies being violated. He told commissioners the agency is hiring an outside audit firm to look at records and develop a training program to ensure he and other mangers at Tourism know how to follow the state laws for the agency they are tasked to lead.

The revelations are not new. In fact, tourism leader including Dutton were notified of these financial problems months ago. In a meeting that FOX 25 has listened to audio from, Dutton told the former internal auditor who discovered the financial irregularities he was going to be fired if he didn’t resign immediately.

“Your facts are wrong,” Dutton told FOX 25 when asked about why it took so long to go public with the financial problems and about the handling of the former auditor.

The charter under which the auditor was hired was approved by the commission. It specifically stated that the auditor reported to the Commission and could only be hired or fired by the commission with some “advice” from the executive director.

The internal audit charter points out the need for independence of the auditor in order to provide proper fiscal management of the agency.

“Sir your facts are wrong,” Dutton said, “I had commission approval to make any personnel changes with the internal auditor that I needed to do.”

Dutton said he got permission from commissioners, but that approval either wasn’t recorded in any agenda or minutes of open meetings or happened outside open meetings.

The Open Meeting Act prohibits a member from obtaining a consensus upon an item of business through a series of private one-on-one meetings. (1981 OK AG 69, ¶ 17).

“This interview has ended,” Dutton said when FOX 25 pressed him on the facts surrounding the auditor’s position and illegal financial activity that happened under his command.

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