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Misuse of public funds by state employees will not be tolerated, and those who have violated the public trust should be dismissed from their positions, Gov. Norm Bangerter said Saturday.

Bangerter's comments came in the wake of a state audit alleging improper business practices and misuse of public money among the top eight employees at Timpanogos Community Mental Health Center, who reportedly siphoned off more than $3.5 million."Fiscal improprieties at the Timpanogos Mental Health Center are a blatant violation of public trust and are totally unacceptable to me and to the taxpayers of Utah," Bangerter said during a news conference in the Governor's Mansion.

Legislative Auditor General Wayne Welsh called the misuse of funds among the most blatant and egregious he had ever seen. The largest apparent abuse involves youth program director Carl V. Smith, whose 1987 compensation totaled more than $700,000, even though his base salary was only $47,627. The audit said the eight employees have used "questionable internal contracting practices" to pay themselves many times their regular salaries.

"I will use my full gubernatorial powers to assure that all those involved in the Timpanogos Mental Health Center improprieties be brought to justice," Bangerter stressed. "Additionally, as governor I will see that any state or local employee or educator found guilty of misusing public funds or otherwise seriously breaching the public trust be removed from public employment, and furthermore that they be criminally prosecuted if appropriate."

Bangerter said he will send a letter to all state employees warning them that neither he nor the Utah public will tolerate public employees breaking the public trust or misusing public funds or resources.

"As taxpayers, we should be concerned when there is an abuse of our monies," he said in the letter. "As public employees, we should be concerned when citizens abuse our reputation."

Bangerter said he's requesting that similar letters be sent by the commissioner of higher education, the superintendent of public education and all city and county officials to every employee under their jurisdiction.

The governor reported that this is the second time in the past six months that Utah has experienced serious improprieties and breaches of the public trust by state, local and education officials.

He said he was referring to a recent report by State Auditor Tom L. Allen that as much as $138,000 in office equipment and furniture turned up missing from the State Office of Education over the past three years.

Utah has had two other state employees come under fire for misusing public funds within the last three years.

Leland Burningham resigned as state superintendent of public instruction after disclosures that he had misused travel vouchers and padded expense accounts when he was a school official in Ogden. And in October 1988, Utah Valley Community College President Marvin Higbee resigned under pressure and agreed to repay the state for misused funds.

Despite these obvious indiscretions, Bangerter said he believes that the vast majority of employees who work for state and local government are honest, hard-working and fully ethical in their activities.

"Government service brings with it the requirement that we be above the type of thing where we let our personal ambitions get the best of us," he said.

While Bangerter said his administration will be vigilant in ensuring that all state employees are held to the highest standards expected of them, "I am not prepared to say we are going to go in and look over everyone's shoulders. That would cost a lot of money.

"Audits are not the easy answer. The answer is for people to take their responsibilities seriously and to be absolutely ethical and forthright in their dealings with public funds," he said. "In this case it was clear that a few people had too much access and they weren't willing to exercise the control associated with it."

Bangerter said they will be examining the state's checks and balances system. And Allen said his office will begin work April 25 on a far-reaching audit of the Timpanogos center's finances, with a focus on recovering at least some of the $3.5 million.