A forensic review presented to the Yukon City Council on Jan. 14 found repeated governance and internal-control weaknesses, potential misuses of funds linked to a nonprofit foundation and shortcomings in investigations of personnel complaints. The council unanimously adopted a resolution acknowledging the findings and directed the city manager and staff to begin implementing remedial measures.

The review, delivered by Michael Breon, partner at North American Forensic Accounting, said the city lacked basic governance documents — a code of conduct, conflict-of-interest rules and a whistleblower/concern line — and found multiple control gaps in cash handling, fixed-asset inventories, payroll payouts and competitive bidding. Breon told the council the lack of those controls contributed to a culture in which employees were reluctant to raise concerns and where prior audit findings remained unaddressed.

Breon’s report highlighted several specific items: payments from a health system contract that were deposited to the Yukon Community Support Foundation (YCSF) rather than city accounts (including $75,000 in 2008, and additional payments in 2019), a roughly $263,719 cost tied to storage buildings where minutes show YCSF agreed to reimburse the city but did not fully do so, and an extra vacation payout at a former city manager’s contract that the team estimated cost about $34,895 (448 hours over the 800-hour cap stated in the employee handbook). The report also cited old outstanding checks, uneven bank reconciliations and weak segregation of duties in payroll and human-resources processes.

Breon said the Yukon Community Support Foundation, a 501(c)(3) formed in 2001, was on the city’s accounting software and that some funds contracted by the city were routed to the foundation’s bank account instead of being deposited to the municipal accounts. The report recommends a full accounting and, if necessary, demand for records from YCSF and remediation of repeat findings identified in the 2015 forensic audit and later financial statement audits.

Mayor (Mr. Mayer) and council members expressed concern and support for corrective steps. Vice Mayor Wooten said the city must "turn a page" and implement reforms; Councilman Trevor asked who authorized prior local investigations and voiced concern about incomplete personnel investigations cited in the report; and several council members praised the thoroughness of the review.

Following discussion, the council voted unanimously to adopt Resolution 2025-1, which formally acknowledges the forensic review’s findings and directs implementation of the consultant’s recommended measures, including creation of policies, investigatory procedures and timelines. The council also voted to direct the city manager to hire a finance director to strengthen financial oversight.

Breon recommended immediate action to restore oversight: reinstate a confidential reporting line, adopt a formal ethics and conflicts policy, perform a detailed audit of YCSF and PEST (police, fire and employee sales-tax) fund transfers, document internal-control procedures and increase IT logging and physical access records. He characterized governance issues as longstanding and said remediation will be a multi-year effort.

The council’s resolution sets deadlines and deliverables; city staff said they will prepare a project plan, prioritize items, and report progress back to council at regular intervals. City Manager Mike Castro said staff will make every effort to meet the deadlines and will report where timelines need adjustment.

The council's split of next steps includes immediate policy drafting, hiring a finance director, restoring a complaint hotline and commissioning follow-up audits and reconciliations. Council members and staff said these actions are intended to increase transparency and rebuild public trust.

The forensic report and council resolution do not allege criminal charges in the presentation; Breon recommended further targeted procedures where anomalies were identified and suggested some items may require additional investigation.