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SALT LAKE CITY — The state of Utah has put a freeze on any new taxpayer money going to Grand County. This comes several months after a scathing audit found the county intentionally misspent several million dollars meant for tourism.
The audit came out in June, and the state gave Grand County several months to make things right. State Auditor John Dougall said this week the county has failed to do that, so now the state is withholding taxpayer funds until the county makes necessary changes.
"That really motivates most governmental entities to become compliant," Dougall told KSL-TV, "because if you don't have tax revenue, you don't really have money to spend."
Audit found 'pattern of abuse'
Grand County is known for tourism, with places like Moab and Arches National Park. But a recent state audit found the county has been misspending tourism tax dollars for years.
"Where we see a repeated pattern of misuse, that causes concern," Dougall said.
The audit specifically found Grand County spent too much on dealing with the effects of tourism and not enough on promoting it, which is a violation of state law and a "pattern of abuse."
"These findings show a consistent pattern of Grand County using statutorily restricted tourism-related tax revenues for unallowable purposes," the audit states. "We consider this increasing pattern of misuse to constitute intentional abuse rather than uninformed error. The commission has the ultimate responsibility for the proper use of county funds."
The audit told Grand County to fix things, including reimbursing roughly $5.3 million that was improperly spent.
"We have not seen official corrective action yet in regards to what we noted in the audit," Dougall said.
Now, as of Wednesday, Dougall's office is withholding taxpayer dollars from Grand County, something state law gives him the power to do.
"We expect them to reimburse those improperly spent funds, to account to us that they have taken that corrective action," said Dougall. "Then we will release the funds."
Grand County responds
In a statement, Grand County officials said they are working to meet the state's requirements.
"Completing the necessary review and submission of reports and certifications required by the state, which incorporate corrections agreed upon by the commission with respect to (tourism tax) revenues, is the highest priority … and will be completed as soon as possible," said Gabriel Woytek, Grand County clerk and auditor.
Two Grand County commissioners, Jacques Hadler and Kevin Walker, appeared virtually this week at a Utah legislative hearing discussing the audit and the county's response to it.
"I think we've only spent money in ways that we feel we are on very, very solid legal ground doing," said Walker, vice chair of the Grand County Commission, during a meeting of the Political Subdivisions Interim Committee on Wednesday.
During the hearing, several lawmakers blasted the Grand County leaders for not following the law and not admitting there was a problem.
"At a fundamental level, we need to figure this out, and you do not have the latitude that you believe that you have based on the findings of audits," said Rep. Casey Snider, R-Paradise.
Lori McFarland, a Grand County business owner, also spoke at the legislative hearing and said the county is not adequately promoting tourism, which is impacting the local economy.
"Resistance to investing in the visitor economy is hurting workers and their families," McFarland told lawmakers. "Shifts are fewer, tips are down, and workers are taking on extra jobs or a side hustle."
But the county commissioners insisted they are "actively" promoting tourism and want to do so responsibly.
"I think we have differing ideas on promotion," said Hadler, chair of the Grand County Commission, noting that some worldwide destinations have been overwhelmed by tourists. "I think that our messaging with responsible tourism goes a long way towards sustaining our tourism for the future."
