The State Auditor released the final audit of the Greenbrier Valley Airport this week, covering the fiscal year ending June 30, 2015.
The audit, performed in accordance with Government Auditing Standards, is dated May 5, 2016, and specifies that the report is “qualified due to the Authority not maintaining all support documentation for amounts presented in the financial statements.”
The year in question covers an amount of time when the airport’s finances were under the watch of Airport Manager Jerry O’Sullivan and Chief Financial Officer Linda Yoak, who both retired last year (the audit lists them as having “resigned”).
The audit’s Schedule of Findings listed several issues with the airport’s financial record keeping, including:
• Segregation of duties. “It was noted that the responsibilities for approving, executing and recording transactions and custody of the resulting assets arising from the transactions were not assigned to different individuals.”
• Monitoring of rent revenues and lease agreements. “It was noted that the Authority did not monitor lease revenues to the extent necessary to properly record and track rent receivables. Specifically[,] lessors were not sent delinquency notices in a timely manner and properly signed lease agreements were not maintained by the Authority … because these receivables were not recorded, there was not reasonable method of tracking delinquent accounts.”
• Policy and procedures manuals. “The Authority has not formally developed and adopted a policies and procedures manual governing the administrative and financial activities of the Authority.”
• Controls over financial statement preparation. “A significant potential exists for misstatements to occur in the financial statements without being detected by employees or management in a timely manner.”
• Unauthorized expenditures. “It was determined … the Authority authorized expenditures that may have been for personal expenses. This noncompliance resulted in several expenditures which were not authorized by State code … and which should have been taxed as fringe benefits.”
• Retention of records. “The Authority failed to retain certain records for examination including invoices and rental agreements.”
Airport authority chairman Lowell Johnson told the Mountain Messenger last August that the airport’s governing board had, for several years, taken a “laissez faire” approach to airport management, deferring to the decisions of O’Sullivan and Yoak.
After O’Sullivan suddenly announced his retirement in February of 2015, Yoak was placed on administrative leave, and also announced her retirement during that leave last summer.
In the meantime, the airport authority has hired a new airport director, Stephen Snyder, a director of finance, Martha Livesay, and an outside certified public accounting firm to oversee the financial management of the county airport.
At a meeting Tuesday evening, Johnson seemed resigned to move forward, stating that the board had “nothing to do but accept” the final findings of the report.
Snyder was more animated. “Cash flows were inconsistent from year to year,” he said. “We still have liquid assets with (investment firm) Oppenheimer for about $3 million, which was moved without the authority’s authority last year.” O’Sullivan reportedly oversaw that transaction shortly before his retirement.
“For 20 years there is no indication of ownership in any of Linda Yoak’s three companies” in the records, said Snyder, referring to Yoak’s family companies that operated at the airport: Aerospace Specialties Inc., Aerospace Specialties of West Virginia, and Please Save a Cat.
Referring to the No Segregation of Duties portion of the audit, Snyder said that Yoak was receiving bills and then “writing checks from the other side of the desk.”
Regarding the writing and enforcement of leases, Snyder said, “We didn’t. It’s that simple. Eight of the 11 rental contracts weren’t valid.” Snyder said that the rental car agencies that operate on site are without contracts and that Mountain Vending, who supplied vending machines to the airport, didn’t pay rent for years. Snyder returned to the subject of Yoak and her companies, which operated out of three airport hangars, for which he said she wrote her own leases for less than market value and seldom paid rent anyway.
In addressing unauthorized expenditures, Snyder leveled his sights on O’Sullivan, his predecessor. “Jerry O’Sullivan had an auto-pay/auto-draft credit card with no review,” Snyder said. O’Sullivan also charged the airport a daily mileage fee for picking up the mail.
“He charged the airport for 12 miles travel every day. He loved picking up the mail so much, sometimes, he would do it twice in one day. He loved getting the mail so much, he would even do it when he was out of the office on vacation,” Snyder said.
Steering the unauthorized expenditure conversation back to Yoak’s businesses, Snyder said that the co-mingling of finances between her three companies and the airport’s was so tangled that it’s nearly impossible to suss out what money was spent on what.
“All I know is a credit card was charged for ferret food,” Snyder said. “We don’t buy ferret food.”
When Johnson urged Snyder to wrap up his impassioned presentation, Snyder stood down, stating finally, “These things will be left to other agencies.”
During a discussion of accounts receivable, Snyder told the board that O’Sullivan still owes the airport $625 for unpaid fuel purchases. Snyder also told the board that Yoak owes $2,600 in rent. Yoak has vacated two of the hangars and is in the process of moving out of one more. Snyder said he expects her to completely vacate by June.
Earlier this month, the Mountain Messenger asked Snyder whether there would be civil or criminal proceedings brought against either O’Sullivan or Yoak in light of the past year’s findings of widespread financial irregularities. Snyder declined to comment.
