A public agency that spends about $1 million a year and is managed by a state legislator has operated without an approved budget, violating Oregon law, according to a recent audit. The Columbia Development Authority, formed in 2014 and based in Boardman, hasn’t taken steps required of virtually every local government in Oregon. Auditors found that it has no budget committee, hasn’t held public hearings or provided public notice about its spending as required by state law. The agency last year took ownership of more than 9,000 acres west of Hermiston that were once part of the Army’s Umatilla Chemical Depot. For at least two years, the CDA didn’t adopt a budget as is required “before any funds are spent,” according to the audit report issued in late October by the firm of Anderson Boylan Ramos in Hermiston. Under Oregon law, it is “unlawful” for a public official to spend money not appropriated according to budget requirements. A public official can be personally liable for such expenditures. The state also can force a public agency to follow budgeting laws. “I have always maintained a standard of excellence in the fiduciary oversight of the CDA.” –Greg Smith, Columbia Development Authority executive director The state does have the authority to force the CDA to comply with the budget law. The agency is managed by Greg Smith, a Republican state legislator from Heppner who is the full-time executive director of the CDA. Smith also has sat on the Legislature’s budget committee for more than two decades, where legislators review state budgets. Auditors cautioned in their report that “failure to adopt a budget increases the chance of irresponsible spending” and “decreases transparency of a public entity.” A year ago, Smith evaluated his performance at the CDA, giving himself the highest score for “reporting, budgeting and resource allocation.” “I have always maintained a standard of excellence in the fiduciary oversight of the CDA,” he said in the evaluation. Smith was hired by the CDA in 2015 at the same time he was serving as economic development director for Malheur County. There is no record the CDA has produced the required approved budget since then. He didn’t respond to written questions. Auditors put the blame not on Smith but on his board. That currently includes Kim Puzey, executive director of the Port of Umatilla; Joe Taylor, chair of the Port of Morrow Commission; Jeff Wenholz, a Morrow County commissioner; John Shafer, a Umatilla County commissioner, and J.D. Tovey, interim executive director of the Confederated Tribes of the Umatilla Indian Reservation. Tovey and Taylor joined the board this year. “The noncompliance occurred due to the board not being able to estimate revenues and expenditures,” auditors found. READ IT: Draft audit report Puzey said the budget matter was “important” but that no budget had been approved because of a recent lawsuit. But court records show that lawsuit was filed after the current budget year started. None of the other board members responded to written questions. The CDA is funded by a federal grant from the U.S. Defense Department and from payments from the five partner public bodies. The Oregon Department of Revenue provides local governments detailed guidance on state budget law. That includes explaining to public officials why the mundane practice of budgeting is important. READ IT: Local Budgeting in Oregon “Many people rely on you, as an elected or appointed official, to see that the annual budget is prepared correctly,” according to the agency’s manual Local Budgeting in Oregon. “Citizens in your district check to see that programs they want and need are adequately funded.” That is echoed in a companion publication available online, the Local Budgeting Manual.” Budgets provide “for the promotion of efficiency and economy in the expenditure of public funds,” the manual states. It notes that it provides training twice a year for local government officials. The Revenue Department couldn’t readily confirm whether Smith or any employee of the CDA has participated in such training. The Revenue Department can order a public body to comply, as it has on recent occasions. The state can also ask the Oregon Tax Court to order compliance. A spokesman for the Revenue Department didn’t address the CDA matter directly but explained that Oregon law “prohibits a public official from spending money in excess of what’s allowed by law.” A public official can be held civilly liable for returning improperly spent funds, either through action by a district attorney or by a taxpayer “if the expenditure constitutes malfeasance in office or willful or wanton neglect of duty.” The CDA Board was scheduled to consider the audit findings on Tuesday, Nov. 26, too late for press time. The audit finding is the latest trouble for an agency that until recently has operated in relative obscurity. A Defense Department spokesman confirmed recently that it is examining whether the CDA has appropriately spent its federal grant, which for the current year was about $750,000. And a divided CDA Board in September revoked a major pay raise engineered by Smith for himself and two other employees. That means Smith’s pay will drop from $195,000 a year back to his earlier pay of $129,000. Auditors said Smith is required to repay the agency for the extra pay he received, a sum pay records indicate could be as much as $33,000. This article was originally published by the Malheur Enterprise, which shares ownership with Salem Reporter. STORY TIP OR IDEA? Send an email to Salem Reporter’s news team: [email protected]. A MOMENT MORE, PLEASE– If you found this story useful, consider subscribing to Salem Reporter if you don’t already. Work such as this, done by local professionals, depends on community support from subscribers. Please take a moment and sign up now – easy and secure: SUBSCRIBE. The post Auditors find Greg Smith-run agency operates without approved budget, violating law appeared first on Salem Reporter.