The Kootenai County Board of Commissioners discussed a proposal by Eide Bailly, the CPA firm that will conduct the forensic audit of the North Idaho State Fair's finances.

The proposal, which still has to be approved by the commissioners and the county’s legal staff, is estimated to cost the county anywhere from $20,000 to $25,000. The firm's partners and senior managers are paid $275 an hour while conducting the audit while managers make $190. Staff associates make $160.

Eide Bailly is headquartered in Fargo, N.D., and has 29 regional offices, including one in Spokane. The county recently started a three-year contract with the firm.

Commissioner Dan Green estimates the audit will begin around mid-October and will likely take 4-6 weeks. Considering Commissioners Green and David Stewart's terms conclude at the end of the year, the commissioners wanted the examination conducted sooner than later.

"(The timeline) is good because it gets done while this board is still here," Green said. "Which I think is important instead of transitioning to another Board of County Commissioners."

Clerk Jim Brannon’s recommendation for a forensic audit in August followed an internal audit performed by his office, which revealed some fairgrounds employees had taken draws against their future pay since 2005.

Former Fair Manager Dane Dugan, who resigned Sept. 1, is noted as having taken 16 advance pay draws since 2012. Other financial data and oversight red flags surfaced.

When internal auditors initially checked out the fairgrounds — a county memo noted it appeared most financial controls of the fair were in order — they saw concerning issues on a smaller scope, which Brannon said warranted his request for a more thorough look at the books.

A third-party audit by Magnuson McHugh and Co. was near completion, but after the forensic audit was proposed by the clerk's office, it legally had to suspend the audit.

Fair Board chairman Gerald Johnson said Magnuson McHugh and Co. considered withdrawing its $6,000 audit altogether, but the local firm is looking to complete its operation after completion of Eide Bailly's forensic audit.

Johnson welcomes a deeper dive into the fair's finances.

"Full speed ahead," Johnson told the commissioners.

Eide Bailly's proposal listed a scope of engagement, noting it will examine cash receipts and disbursements from September 2015 to September 2016, review the county's internal audit findings, conduct interviews with the fair's employees and employ forensic accounting methodologies commonly used during an examination to search for misuse or misappropriation of costs.

Commissioner Stewart, who was in favor of the forensic audit since its proposal, wasn't surprised by the proposed costs.

"The fees are right in line with what we anticipated. I like the idea of capping it at a hair under $25,000," Stewart said.

Eide Bailly recently conducted a forensic audit of the Ada County Treasurer's office ordered by the Ada County commissioners, per the Boise Guardian, where the firm revealed a criminal investigation over a $31,000 discrepancy.

The firm isn't foreign to forensic audits of fair finances, either. In 2009, Eide Bailly combed a Sioux Falls, S.D., fair's books, where it later revealed a fair bookkeeper embezzled $579,000.