Auditor Galloway finds law enables conflict of interest in Ward Parkway Center CID audit

Board executive director has business associations with companies paid over $1.2 million by CID
December 7, 2017

Missouri State Auditor Nicole Galloway released an audit of Ward Parkway Center Community Improvement District (CID) in Kansas City. The audit raises concerns about a conflict of interest with the companies selected to work on the project.  

"When projects are funded by public dollars, they should employ practices to ensure the taxpayers are getting the very best return on the investment," Auditor Galloway said. "More must be done to ensure special taxing districts are acting transparently and in the best interest of taxpayers."

The taxing district was established to fund improvements to the existing Ward Parkway Center. The two-phase project has been funded through a bond issuance totaling $28 million as well as $9.2 million in developer notes to be repaid by a 1 percent tax on purchases within the district.

The audit found that the three different construction management companies hired for the project employed or shared ownership with the employer of the executive director as well as every member of the CID board. These companies also served as the management firms operating the Ward Parkway Mall and were not selected through a competitive bidding process.  

Since the project began, these companies were paid approximately $1.3 million. The report recommends that future services be competitively bid to ensure tax dollars are being used as effectively as possible and to alleviate concerns about conflicts of interest.

The complete audit report if Ward Parkway Center CID is available online here.    

Today, Auditor Galloway also announced she will initiate an audit of CIDs throughout the state. The audit will include a general review of the laws to establish and manage CIDs and an analysis of how they are being implemented.

"I am committed to holding special taxing districts accountable and shining a light on how these taxpayer dollars are being spent," Auditor Galloway said. "Our audits have found that too often, these projects are plagued with problems or are not living up to their promises, which is why I am going to do a thorough examination of the laws that govern special taxing districts."

In 2016, a new law authorized the State Auditor's Office to audit CIDs without requiring citizens to initiate the audit through the petition process. This year, Auditor Galloway completed audits of four CIDs: North Oaks Plaza CID in Northwoods, BaratHaven CID in Dardenne Prairie, Independence Events Center CID in Independence and Ward Parkway Center CID. 

Individuals who would like to provide information for consideration during the statewide CID audit may contact the State Auditor's Whistleblower Hotline anonymously at 800-347-8597, by email at moaudit@auditor.mo.gov, or online at auditor.mo.gov/hotline.

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