Audits released Friday by the City of Broken Arrow show financial irregularities at the Broken Arrow Economic Development Corporation under former president and CEO Wes Smithwick.
Those include more than $20,000 in personal expenses charged to EDC credit cards by Broken Arrow Chamber of Commerce employees, including $723 for a spouse's plane ticket and $1,958 in undocumented cash advances. The EDC is under the chamber.
The audits covered 2017 and also found more than 40 percent of 839 credit card transactions reviewed were improperly documented, and dedicated downtown redevelopment funds were shuffled to cover shortfalls in EDC's economic development services contract.
City Manager Michael Spurgeon said despite the issues, Broken Arrow is committed to the public-private development model used over the past decade with the chamber and EDC.
"We’ve had tremendous success in job creation and job growth in all business sectors, we revitalized our downtown into the award-winning Rose District, and because Oklahoma cities are overly dependent upon sales tax, we’ve brought more businesses to our community so citizens can shop locally," Spurgeon said.
As a result of the audits, however, the city has taken over downtown development services. The city renewed its contract for economic development services through the EDC, such as site selection. That contract incorporates recommendations from the audits to improve financial controls and ensure compliance.
Spurgeon said the audits were sparked by credible complaints from former chamber employees and EDC board members early last year. Smithwick resigned June 1, weeks after the city requested financial policies, procedures and expenditures for 2017. He cited health reasons at the time.
Broken Arrow Police reviewed the audits.
"I gave a copy of the report to Chief Brandon Berryhill, and I asked that he and his team take a look at what was in the report. I asked them to meet with the auditor to review the findings, and he came back and told me that they did not rise to that level of being criminal," Spurgeon said.
The EDC paid back $20,000 to the city late last year and is now conducting its own review. Chamber board member Ted Cundiff said they have not ruled out legal action against former Smithwick.
"The intent is to ask for any personal expenses back if it’s deemed that there are any," Cundiff said.
