PUD dismisses financial officer; state audit still underway

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The Jefferson County Public Utility District (PUD) has terminated its chief financial officer as state auditors finish an audit of the PUD's books from 2013 and 2014.

Bob Caprye, who was hired as CFO in early 2015, was put on administrative leave by Jim Parker, PUD manager, on May 5. Parker said on May 16 that he could not say why Caprye was dismissed. Caprye wasn't available for comment. As of Monday, Caprye had not signed a separation agreement that would have made May 15 his last day, Parker said.

Parker met with auditors last week to assure them that an interim CFO from Texas, Tammy Esslinger-Lehman, as well as the consulting firm of Moss Adams, which has worked with the PUD in the past, would be available to finish audit work.

Esslinger-Lehman is earning $165 an hour as a consultant. Parker said he expects her to work for about a month. She specializes in a bookkeeping system the PUD needs to use, as well as helping small public power companies implement software, policies and procedures for that system, Parker said.

Kelly Collins, director of local audits for the Washington State Auditor's Office, said last week that the lack of a CFO could have a significant impact on the auditors, and she said firing Caprye was not something the state auditor's office had recommended.

“It's unfortunate. It can cause problems to have turnover,” Collins said.

Caprye is the fourth CFO the public utility has had since 2013, when it bought the holdings from the private utility Puget Sound Energy for $109 million. The PUD grew from eight employees to more than 30 employees in a less than a year.

This is also the second year in a row that the PUD expects to have audit findings – the most serious of the three levels of state audits. The PUD was 171 days late filing its 2012 financial statements. Its 2013 and 2014 books currently are being audited by the state, and findings are anticipated.

The 2013 and 2014 finances were not complete when Caprye took the job in 2015.

Parker said on Monday that he did not think Caprye's departure would have an impact on the audit outcome. He also said the state auditors would be back for a public meeting on the audit results.

ANNOUNCED AT CAB

On May 9, Parker announced Caprye's fate at a PUD Citizens Advisory Board (CAB) meeting, “I don't know if you guys heard, but we released Bob. Bob no longer works for us at the PUD.”

Asked by a CAB member if there was anything advisory board members could tell the public about Caprye, Parker said, “Not at this time, because it could end up in litigation.”

On May 16, Parker said he does not know if that could happen with Caprye, only that there is a potential issue with a former employee.

One CAB member asked if there was a “pattern starting to form here,” and Parker said he felt “it is the age of the people who are CFOs.”

He noted that David Papendrew, the contracted auditor when the PUD bought the system, was 68 and didn't want to deal with some of the auditing requirements the PUD needs to follow for a loan from the federal government. Papendrew left within a matter of months of the PSE purchase.

Michael Legarsky, who had been laid off as financial director for the City of Port Townsend, was hired after Papendrew. He lasted a year and eight months. Legarsky also was ready to retire, Parker said.

The PUD then hired Greg Kester, who works for Mason County Public Utility District 1, as an interim financial officer, hoping to hire a more permanent one. He also left.

Caprye, who worked as a controller for Alaska Power & Telephone Company at its Port Townsend office, was hired in early 2015.

In February 2016, PUD commissioners Ken Collins and Wayne King voted to bring in the consulting firm of Moss Adams to help Caprye with the state audit. At that point, King voiced growing unhappiness with Caprye's progress with a financial report.

Parker later said he believed Caprye was doing a good job and he expected many of the issues the state audit raised to have been addressed by the time the audit is publicly released. That still hasn't happened.

Last week, Parker told CAB, “I don't think Bob is familiar with the government sector and how government works.… He was more bottom-line dollars and how to get stuff done.”

Ken Collins, PUD board chair, also declined to say what happened with Caprye. “It's a personnel matter,” said Collins, adding he worked in human relations for most of his life and that such decisions were hard.

Both Collins and Parker said they think it will be hard to find a new CFO.

Kelly Collins, the state auditor, agreed that auditors are hard to find these days.

“There's not enough people coming into the workforce, and all this knowledge is walking out the door,” she said. It is becoming harder to recruit for auditors in government, she noted. There are more restrictions in government, Kelly Collins said.

OTHER CHANGES

Parker expects to use a headhunting firm to find a new CFO as well as a comptroller. In addition to Esslinger-Lehman, the PUD has hired Bill Kolden as a temporary human resources officer, because of staffing challenges. Parker had been handling human resources.

Parker also recently promoted Kevin Streett, current electric superintendent, to assistant manager.

Parker said Streett does not get a pay raise for being promoted, but would be second in line to Parker.