Apache Co. treasurer faces suspension

By Alistair Mountz
Special to the Times

PIÑON, Ariz., May 4, 2012

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Katherine Arviso

A recent audit of the Apache County treasurer's office has found $6.5 million in mistakes, according to county manager Delwin Wengert.

As a result, the Apache County Board of Supervisors has scheduled a May 8 meeting to decide whether to immediately suspend county treasurer Katherine Arviso.

About $4.5 million of those mistakes are losses on investments and may mean the county's school districts, libraries and fire departments and other agencies will face a severe budget cut this year.

For example, Wengert estimates that the budget cut for Chinle Unified School District could be $1 million and the Window Rock school district could lose between $700,000 to $1 million.

Arviso, who has been county treasurer since 2004, said that her possible suspension is an orchestrated effort by county supervisor John Lee abetted by Wengert and others to attack her character, integrity and performance as Apache County treasurer.

She said Lee is interested in placing family members into positions of authority within the Apache County government - specifically, his brother-in-law, Richard Brower.

The budget cuts would result because the loss of funds have not been apportioned to entities around the county, Wengert said, and failure to do so has inflated the agencies' budgets beyond what they really are.

"Think of it like a whole bunch of money in a bath tub," explained Wengert, "and that is money the treasurer controls. In that tub is $128 million. The treasurer has invested that money and there have been losses. She's required to apportion losses each quarter, but she has not done that over the last several years so it's accumulated. Now, the 4.5 million in losses will have to be apportioned at one time.

"The budgets are artificially too high," said Wengert. "We all think we have more money than we actually do."

A press release from Wengert's office lists other issues including $2 million "erroneously allocated" and failure to "adequately supervise" employees "leading to a culture in which embezzlement, 'floating' and other improper use of county funds was rampant."

Brower, Wengert's brother-in-law, has filed papers to run against Arviso for Apache County treasurer, Arviso said, and his brother-in-law, John Smith, helped develop the documents that are the basis for the allegations against her.

Arviso was not allowed to speak at a May 1 board of supervisors meeting where her performance was discussed in executive session. Afterwards she was informed of the May 8 meeting regarding her possible suspension.

She also claims the board of supervisors is party to the problems in the treasurer's office and noted, "Repeated requests for adequate funding and staff, improved automation, and pleas for assistance over my two terms as county treasurer have fallen on deaf ears."

"Absolutely false," Wengert said about the Arviso's claim. "Why would anyone want to tell Chinle school district they might lose a million dollars for political reasons? This is solely based on math calculations. There is nothing political about these investment losses that have occurred. This is based on problems in treasurer's office that have occurred for years. It's not political."

Official results of the audit are pending.

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