BY FREDA MIKLIN
The Villager doesn’t usually report on internal issues in other areas of metro Denver but recent events in Adams County are so unusual we decided to make an exception.
On October 28, the five members of the Adams County Board of County Commissioners (BOCC) filed a lawsuit in Adams County District Court against the elected county treasurer, Lisa Culpepper, alleging that she has not “reconciled the many bank accounts she manages” with her office’s software system “since at least March 16, 2021,” has failed to submit required “monthly reports to the BOCC and all other taxing jurisdictions that includes the amount of taxes collected in the preceding month for the entirety of 2019, the entirety of 2020, and January through July of 2021,” and “did not provide reports or otherwise exhibit her books and accounts at the BOCC meetings in January 2019, July 2019, January 2020, July 2020, January 2021 and July 2021” as required by state law.
The lawsuit also states that, as part of its annual plan for an internal audit, on October 20, 2020, the BOCC retained BKD CPA & Advisors to perform an internal audit of Treasurer Culpepper’s office. On July 16, after six months of failed attempts to get the necessary cooperation or documents needed to perform the internal audit, BKD informed the BOCC that it “had not been able to complete the internal audit of the Treasurer’s office.” In their letter to the BOCC, BKD noted several examples of transactions it had been able to document that indicated “significant delays between the receipt of cash and the recording of cash into the appropriate fund account.” Examples noted by BKD included a deposit of $90, 285,974 in federal Cares Act funds that “was received per the bank statement on April 22, 2020” and recorded on the books 209 days later on November 17, 2020. They also noted an electronic funds deposit of $6,347,975 for sales tax from the State of Colorado that was received per the bank statement on February 10, 2020 and recorded on the county’s books 112 days later on June 1, 2020.
BKD also noted “a lack of appropriate segregation of duties in the Treasurer’s office” that “allows for incompatible duties to be performed by the same person with little or no oversight,” reporting that when this issue was pointed out to Culpepper, she responded that she did not agree “with BKD’s concern about the lack of appropriate segregation of duties” and “no alternative methods to address the issue were presented” to the auditors.
When members of the BOCC shared the information from BKD with Culpepper on July 26, 2021, according to the lawsuit, “the Treasurer alleged that BKD was biased and stated that she would not work with them to complete an audit.” The BOCC then retained another audit firm, Eide Bailly LLP as well as an attorney for Culpepper. Both the Treasurer and her attorney agreed to Eide Bailly LLP as the audit firm. Eide Bailly sent a request for documents and information to Culpepper on August 11, 2021, according to the lawsuit. As of October 28, 2021, when the legal action was filed 75 days after the request for documents and information was made, no information from the Treasurer’s recordkeeping system had been provided to the new auditors. According to the BOCC, “Eide Bailly has informed the County that it cannot complete its audit without this information and that it has not been successful at obtaining the information requested from the Treasurer.”
The lawsuit also alleges that the Treasurer’s office made three duplicate electronic funds transfers to taxing jurisdictions within Adams County totaling $549,438 and that, “on all three occasions, the county learned of the duplicate payments when the overpaid entity contacted the county’s finance department to report receipt of funds not owed to the jurisdiction.”
In addition to the financial recordkeeping issues the BOCC noted, in a letter to Culpepper dated August 18, the BOCC pointed to five complaints from employees in the Treasurer’s office “about being bullied, belittled and disrespected by you personally.” The commissioners noted that, “in the two and a half years since you have (been) Treasurer… 16 employees left the organization and eight others have transferred to other departments. This level of turnover in a department with 17 positions is extremely concerning and certainly indicates that there may be management issues.”
A week later, the BOCC wrote to Culpepper again about “a significant number of constituent complaints about not being able to get a response (from the Treasurer’s office) regarding the status of tax payments, tax liens, missing payments, uncashed or missing checks, concerns about overpayments, and questions about delinquency notices.” They also referred to, “residents unable to sell or buy homes for weeks or months because they cannot get confirmation that taxes have been paid.”
Adams County Commissioners Lynn Baca, Eva Henry, Steve O’Dorisio, Emma Pinter, and Charles Tedesco asked the Adams County District Court to find that Treasurer Culpepper has failed to perform her duties as required by law, which will “likely negatively impact the BOCC’s ability to perform its statutory duties.”
Denver7 News reported on October 29 that the county told them that “they don’t know if money is being embezzled or if Culpepper is just incompetent because she won’t allow them to review the books, blocking two recent audits of her office.” Culpepper responded to Denver7 News, saying, “They know for a fact that’s not the case,” regarding the allegations of incompetence and embezzlement, continuing, “I’ve been working 12 to 16-hour days recently. Anyone can check the logs to verify that.” She addressed the dispute with the commissioners by saying, “My colleagues and I have a disagreement about constitutional checks and balances. Sometimes a third party is necessary to resolve things.”
When she was sworn in as Adams County Treasurer on December 14, 2018, Culpepper, an attorney, was described as being “well suited for the position (because) she is an attorney and has practiced for the last 20 years, with experience in real estate business. Previously she worked tax auditing and compliance and criminal investigations for the Colorado Department of Revenue for nearly 15 years.”