After months of negotiations, corrections and collaboration with the Utah State Auditor’s Office, Grand County has resolved all issues identified in an audit, unlocking $13.4 million in state-allocated funds frozen since September.
Clerk-Auditor Gabriel Woytek confirmed the funds’ release, which occurred on Dec. 27, during the Jan. 7 Grand County Commission meeting.
“My office looks forward to the opportunity to implement improved practices and continued collaboration and understanding with state level offices,” Woytek told The Times-Independent.
The June audit identified misuse and misappropriation of restricted tourism tax revenues from January 2022 through December 2023. Throughout the months, the commission has agreed with some of the findings and argued that others are a result of different interpretations of state code, but after several discussions with the auditor’s office, an agreement was reached.
Impact of frozen funds and audit
Woytek told The Times-Independent that the released funds include $5.6 million in county property tax revenues and $7.7 million in sales and use tax distributions.
He added while the freeze caused minor losses in interest income, it did not disrupt essential services. To ensure continuity, Grand County temporarily floated Rural Healthcare Sales Tax disbursements to the EMS Special Service District and Canyonlands Healthcare Special Service District, preventing operational interruptions during the freeze.
The audit findings, initially projected to require over $4.5 million in reimbursements and fund reallocations, were reduced significantly after recalculations and discussions with the state auditor’s office.
All in all, the final amount required for compliance was around $900,000, with adjustments ensuring no net impact on overall fund balances.
The state auditor’s office officially responded to the county’s corrective actions on Dec. 2 in a letter, outlining final steps required to release the funds.
At a Dec. 6 special meeting, the commission unanimously approved a motion authorizing Woytek to finalize all required changes, draft a response letter to the auditor’s office and continue collaborating with state officials to implement needed adjustments.
With these steps completed, the funds were deposited into county accounts on Dec. 27.
Audit findings and corrective actions
The audit detailed five key findings that required fund transfers, budget adjustments and policy improvements to achieve compliance:
Tourism mitigation fund overuse
The county exceeded the 63% cap on Transient Room Tax (TRT) funds allocated for tourism mitigation – a mistake they owned up to since the beginning.
Recalculations based on the state fiscal year reduced the required reimbursement from over $1 million to $650,000. This adjustment resulted in a $350,000 reimbursement to the general fund.
Noncompliance with accounting principles
Prepaid contracts for economic development activities that totaled $700,000 were flagged for not being recognized over their contract period. An audit adjustment resolved this issue without further financial impact.
Improperly classified expenditures
Perhaps the most contentious finding, the auditor’s office determined that approximately $883,000 in expenditures — including Trail Ambassador expenses, flood relief grants and art purchases — were improperly classified as tourism promotion.
To address this, the county reimbursed $260,000 to the tourism promotion fund, resulting in a net reimbursement of $85,000 to the general fund.
Misuse of TRT funds for economic development salaries
About $70,000 in economic development staff salaries were improperly paid from TRT promotion funds.
The county reclassified these expenditures and implemented a time study to ensure accurate future allocations. Woytek said approved splits are now 90/10 for the Economic Development Director and 40/60 for the Associate Economic Development Director (Tourism Promotion/Economic Development), with adjustments pending based on continued studies and state auditor approval.
Improper use of TRCCA funds
Over $2 million in Tourism, Recreation, Cultural, Convention, and Airport Facilities Tax (TRCCA) funds used for the Grand Center and $200,000 for the Old Spanish Trail Arena were deemed noncompliant.
To resolve this, the county proposed offsets, including $800,000 for airport maintenance and nearly $3 million for law enforcement, resulting in no net financial impact on fund balances.
Auditor’s Recommendations
The auditor’s office emphasized in its letter the need for stronger financial oversight to ensure compliance with statutory requirements before expenditures are made.
Legislative clarification on allowable uses of TRT and TRCCA funds is also possible, which may impact future budgeting practices.
This story was first published by The Times-Independent.
