A 60-year-old Pierce County agency that helps landowners conserve resources and farmers preserve their way of life is trying to renew its main funding source, even as county leaders raise concerns about its spending practices, leadership and accountability.

The Pierce County Conservation District this week found itself under scrutiny by the rules committee of the Pierce County Council. Executive Director Monty Mahan was questioned about how the district is managing about $1.2 million a year in county taxpayers’ money.

Some County Council members pointed to a state audit released in July that cites the district for lacking adequate controls over purchasing and disbursements, property tax revenues and financial reporting. Among the findings – some of which had come up in previous years, as well – was improper authorization of checks totaling more than $400,000.

Councilman Dick Muri, R-Steilacoom, said Monday’s discussion could be a prelude to the County Council rethinking its agreement with the conservation district. A $5-per-parcel property tax assessment, first approved in 2003, is scheduled to expire at the end of this year.

County Councilman Shawn Bunney, R-Lake Tapps, suggested the extension could be in jeopardy. In addition to the audit, he has concerns related to a cold-storage plant that the district hasn’t built in the Alderton-McMillin area.

“I will not vote for (the agreement extension) unless we have much, much better accountability,” Bunney told The News Tribune.

But the audit also notes the County Council’s role in allowing problems to persist. In 2007, a new agreement was reached that relaxed the district’s reporting requirements to the county, such as reducing the frequency of reports from quarterly to yearly.

“The District and its oversight body, the Pierce County Council, failed to establish effective administrative controls over the spending of special assessment revenue,” according to the audit.

The district was created in 1949 to help landowners with responsibilities such as maintaining fish and wildlife habitat. Since 2004, property owners in unincorporated Pierce County, Tacoma, Lakewood, Puyallup, University Place, Sumner, Steilacoom, Milton and Fircrest have paid the $5 annual special tax assessment.

The district collects $1.2 million of its $1.6 million budget from the property tax every year. The rest comes from state money earmarked for pollution reduction and other conservation programs.

The district has used the tax money for projects such as a mobile meat processing plant so local farmers don’t have to send their animals to other parts of the state. It also holds agriculture workshops, and helps low-income and senior residents by providing reduced-cost produce at farmers markets.

“The great thing about our assessment money is we can do things that aren’t conventional, but they’re necessary,” Mahan said.

He said the district doesn’t have significant problems with its books; it’s mostly a problem of lack of communication with the state about what auditors want fixed.

“When the auditor used to find things it didn’t like, it would tell us on the spot,” he said. “Often times that same week, we’d fix it at the board meeting.

“A couple of years ago, the nature of the audits changed,” he said.

The recently released state audit, which examined the conservation district in 2007, notes how it issued checks of more than $10,000 at least four times – for a total of $265,768 – without the board’s approval as required by policy between Sept. 25, 2007, and Dec. 31, 2007. The audit also identified 95 smaller checks totaling $150,020 that weren’t approved properly.

The state also found district employees weren’t documenting expensed meals properly, nor was the district properly overseeing how employees used district credit cards.

Some of these problems had been identified in previous years’ audits, and policies were changed as a result, but they were neither followed by staff nor enforced by the board, the audit says.

With regard to the $5-per-parcel tax, the state found the district didn’t submit an annual report to the Pierce County Council nor maintain individual reports on how it spent money collected in each of the participating cities, which it had done in previous years.

The conservation district responded, saying its five-member board had approved and budgeted individual expenses over $10,000. It argued the board also reviewed the smaller checks; it just didn’t sign off on the bottom of each individual check register.

As for the annual report to Pierce County, the conservation district said it did submit one. It shouldn’t be held responsible if someone else lost the document, it said.

The district also responded that it was advised by a consultant to view its boundaries as an “organic whole.” To split the county into areas and dictate the money could be spent only where it was collected, the district said, “would result in political winners and losers, but not necessarily overall effective gains in natural resource conservation.”

Mahan said he’s glad this week’s discussion took place. The county, he said, has a legitimate role in advising how the conservation district spends taxpayers’ money.

“I don’t expect them to cancel our funding,” Mahan said. “Too much good comes from it.”

Brent Champaco: 253-597-8653

brent.champaco@thenewstribune.com