Author: Kristie Wells
At a recent meeting with the Nevada Department of Taxation’s Committee on Local Government Finance, IVGID came under close examination over its financial practices, including budget management and findings from the forensic due diligence audit. The session highlighted concerns about potential over-expenditures, the district’s budget practices, and its leadership’s handling of financial oversight.
You can watch the entire meeting here, and we’ve provided both a high-level summary and a detailed review of the discussion below.
Key Highlights:
- Present at the meeting were IVGID Trustee Ray Tulloch, Interim General Manager Karen Crocker, and Interim Director of Finance Susan Griffith.
- The Committee on Local Government Finance expressed concerns over IVGID’s General Fund and unbudgeted spending, such as Board-approved special projects like the Rubin Brown forensic due diligence audit.
- Trustee Tulloch deflected responsibility for the District’s financial issues, shifting blame to prior IVGID management, the recently resigned General Manager McGee, IVGID’s attorney, and the IVGID staff, rather than acknowledging the Board’s role in approving unbudgeted expenditures.
- The Committee emphasized that the current Board shares responsibility for some of the financial challenges, particularly in approving expenditures without available resources.
- The fiscal year 2024 audit has begun on schedule, with a draft report expected by Davis Farr, IVGID’s audit partner, in December.
- The Interim Director of Finance, Susan Griffith, explained that bank reconciliations remain outstanding due to staffing shortages and prioritization of the audit work.
- While the Committee did not place IVGID on fiscal watch at this time, it remains a looming concern if corrective actions are not taken swiftly.
- A subcommittee has been appointed consisting of Gina Rackley (Chairperson), Josh Foli, and Jeffrey Share to work with IVGID and guide the district toward compliance with the Department of Taxation’s requirements.
Budget Analyst’s Perspective on Fiscal Management
Kelly Grahamman, IVGID’s budget analyst, presented a report outlining financial strains due to high staff turnover, challenges with a new ERP system (Tyler Munis), and costs related to the forensic audit. She highlighted that the Board’s approval of a budget augmentation in January 2024, without a viable revenue source, violated state financial regulations. The use of the ending fund balance as a revenue source was denied, as it cannot be used for non-capital expenditures under Nevada law.
Graham also pointed to delayed bank reconciliations for several months, raising concerns about over-expenditures in the fiscal year 2024 budget. With the budget augmentation denied, IVGID may face a budget shortfall that could require immediate attention.
IVGID’s Efforts to Address Financial Challenges
Interim General Manager Karen Crocker and Interim Director of Finance Susan Griffith expressed their commitment to resolving IVGID’s financial issues. They noted ongoing efforts to improve the district’s financial operations, including enhancements to the Tyler Munis system and revisions to procurement policies. Griffith reassured the Committee that the fiscal year 2024 audit remains the top priority.
Jennifer Farr, the audit partner overseeing the 2024 audit, provided an update, confirming that the audit started on time and that most documentation was received as requested. If the audit proceeds without major issues, a draft report should be available in December and submitted on-time.
Trustee Tulloch Refuses to Accept Responsibility
The recent forensic audit of IVGID revealed critical vulnerabilities in internal controls, identifying 16 high-risk issues that require urgent attention. Trustee Ray Tulloch, responding to questions on the Board’s role in these findings, deflected accountability to previous boards, staff, and district legal counsel. When pressed on the Board’s oversight of unbudgeted expenditures—especially the significant cost overruns linked to the forensic audit—Tulloch cited the board’s limited capacity, stating members are “very part-time.”
The audit committee underscored that it is ultimately the Board’s duty to verify sufficient funding for all expenditures prior to approval. The Committee Chair warned that further unapproved spending could result in unauthorized expenditures, urging the Board to take more robust steps toward fiscal responsibility.
During the discussion, Tulloch posed a striking question: “Is IVGID even too big to operate under a GID structure when you see things like this happening?” (timestamp: 1:06:02). His remark left some attendees questioning the motivation behind his inquiry. Does this reflect a lack of confidence in IVGID’s governance model? Or perhaps a response to the views of a vocal minority within the community who feel IVGID has become unmanageable? Others speculate it may signal a trustee grappling with the challenges of navigating a complex financial oversight role in which he feels underqualified.
Public Concerns and the Committee’s Response
In public comments at the Committee meeting, several community members urged that IVGID be placed on immediate fiscal watch, a move that would jeopardize the district’s financial and operational stability. There is concern that these calls may be part of a broader effort to undermine IVGID and shift control of district operations and assets, which raises concerns about the future of the beach deed.
Another community member raised concerns about facility fees, arguing that these fees should be classified as a tax. They proposed that the Committee draft a bill to amend NRS Chapter 318 to place limits on these fees. This amendment, however, is unnecessary and reflects the perspective of the same small but vocal group within the community who oppose the current recreation fee.
The Committee Chair, Mr. Leavitt, expressed frustration with the community’s inability to unite. He noted that ongoing turmoil within IVGID, including frequent turnover of General Managers and staff, has impeded progress. He encouraged the District to get its financial house in order.
Tulloch’s query—and the Board’s next steps—serve as a reminder of the importance of transparency, accountability, and the crucial role of governance in safeguarding IVGID’s future.
Elections Matter
It’s crucial for our community to elect Trustees who are both capable and collaborative, with the vision to guide IVGID in a positive direction. Candidates Michaela Tonking, Mick Homan, and Michelle Jezycki bring the right blend of experience and temperament to do just that. They possess the leadership skills needed to hold staff accountable while fostering an environment of respect and constructive oversight.