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The report, issued Tuesday by Missouri Auditor Nicole Galloway, gave the St. Louis County government, including the partnership, a grade of “poor.� The auditor launched the investigation in the wake of former County Executive Steve Stenger’s guilty plea to public corruption in May 2019.

The Post-Dispatch was the first last month to report on contents of a draft of the audit, which focused heavily on inadequate oversight from the County Council and the county auditor that allowed Stenger and his administration to manipulate county procurement and pay his staffers from other departments’ budgets.

In a response included in the audit’s release on Tuesday signed by St. Louis County Council Chairwoman Lisa Clancy, the council criticized an “inaccurate premise� that the council manages the county government. But it agreed with several of the auditor’s recommendations to shore up problems and said the council had already taken several steps to improve transparency and accountability.

The audit also zeroed in on procurement and compensation practices at the partnership, which played a central role in Stenger’s indictment, and found that the board exercised little oversight of the agency until reforms put in place by Sweeney’s successor.

The partnership, which is also supposed to promote business in St. Louis, receives about $4 million from the county and about $1 million from the city’s economic development arm. The St. Louis mayor appoints four of its board members and the county executive controls 11 board seats.

Stenger installed Sweeney to lead the economic development agency in 2015, and she directed contracts and real estate sales to Stenger donor John Rallo, who also pleaded guilty to federal charges and was sentenced to prison.

In January 2019, following a report in the Post-Dispatch, the partnership board terminated Sweeney’s employment. Sweeney later pleaded guilty to federal charges. She was sentenced to probation and fined $20,000.

The audit offers some explanation of how Sweeney was able to inflate her total compensation to over $500,000 by 2018, according to the partnership’s federal tax filings. And, for the first time, it implicates the former CFO — Joyce Steiger, identified in the audit only by her position — in overseeing unauthorized bonus payments that inflated their salaries without board knowledge or supporting documentation.

Steiger, who received total compensation of almost $350,000 when she retired in April 2019, oversaw bonuses totaling $90,000 for herself from 2015 through 2017. Sweeney received bonuses totaling $160,000 in 2016 and 2017, according to the audit.

The audit also says Steiger “abused her position� by instructing her staff to add to her paid time off hours and rolling over her unused hours, contrary to the partnership’s policy. That resulted in her receiving an additional $38,000 in unauthorized compensation when she retired from the partnership in April 2019.

Auditors recommended partnership staff pursue reimbursement of the unauthorized pay from Steiger and Sweeney. The partnership board said in response that it “acknowledges the importance of this recommendation and is consulting with legal counsel to determine the best course of action.�

Sweeney and Steiger did not immediately respond to a request for comment.

No contract

The audit found that Sweeney was hired “without her compensation terms being approved by the Board as required by (partnership) bylaws, and without a contract documenting her compensation package.�

The Post-Dispatch in early 2019 attempted to discover how Sweeney’s compensation had so quickly grown far larger than that of her predecessor, longtime economic development official Denny Coleman. The partnership did not produce any such contracts or documentation in response to records requests.

Auditors also said Sweeney and Steiger in 2016 oversaw bonus payments to 13 other employees totaling $50,000 without performance criteria or documentation. In 2017, the partnership paid an additional $72,000 in bonuses to 14 employees, according to the audit.

In its response, the partnership board noted it did not know any bonuses had been paid until a partnership tax filing released in late 2018 showed significantly higher total compensation for Sweeney and other employees than the board had been aware of. The board also told auditors that it agrees a formal contract is needed for its CEO, that it adopted one when it hired new CEO Rodney Crim, that it stopped paying bonuses in 2018 and that it would approve any future bonus policy.

Former partnership Chairman Karlos Ramirez, who oversaw the board through Stenger’s tenure, told auditors “he only vaguely recalled hearing about the CEO receiving a bonus.� Ramirez remains on the board.

Many of the partnership’s board members were replaced by St. Louis County Executive Sam Page following Stenger’s resignation. New board member Tracy Hart, CEO of construction company Tarlton, recently took over as chair from Ramirez.

In its response to auditor criticisms of its old procurement process, the board said it has made several reforms, including procurement and ethics training, requiring board approval for all contracts over $30,000 and utilizing selection committees made up of partnership staff.

Council response

Tuesday’s report also gave the County Council its first official opportunity to respond to Galloway’s criticisms.

The council said in its response to the audit that, aside from its authority to appropriate tax money, it had little recourse to oversee the county executive. But the council also insisted it hadn’t been asleep at the switch: The statement said the legislative body spent most of the past four years in hearings, “investigating and pursuing legal actions to reveal and rein in the corruption of the past administration.� And, it said, it has enacted changes to the county’s purchasing policies and created new laws and charter amendments designed to improve oversight and transparency.

The audit found that Stenger sometimes abused his authority by sitting on contracts instead of allowing work to be started, giving himself leverage over companies working on county business. The auditor suggested the council should be allowed to execute contracts without the executive’s signature. The council suggested another fix: it could consider a change allowing it to rescind any agreement the executive refused to sign within 15 days.

The council said it could change its rules to preclude the executive from trying to work through one or more council members to interfere in council business by requiring council members to share with the full body any communications they receive from the executive.

The audit also criticized the council for letting the county swap part of a county park to a big Stenger contributor in November 2018.

But the council said the parks director under Stenger, Gary Bess, “intentionally misled� the council and the council authorized the deal based on false information from Stenger and Bess, and it noted county voters approved a charter amendment requiring any sale of park property to go on a countywide ballot.

Bess, in a brief interview on Tuesday, denied that he ever misled the council. He said the county assessor had placed similar values on the properties at the time he evaluated the deal, and council members had the same information when they approved the swap. He suggested Page officials got appraisals saying the swap was a raw deal for county taxpayers because that’s what they wanted people to believe.

St. Louis County authorities said months ago they wanted to undo the swap, but it was not immediately clear on Tuesday if they had tried.

The audit also took issue with a longstanding practice of county executives charging some staff salaries to other county departments and setting salaries for political appointees without council approval. The council said it could consider a change requiring the executive’s staff to be paid exclusively from its own budget. And it said the council did have — and could wield — the authority to set salaries for political appointees.

In addition, Galloway’s report ripped the work of County Auditor Mark Tucker, whose office she said was “unable� to complete audits, did not meet auditing standards, failed to follow best practices, and didn’t have employees with auditing experience. The county charter does not set any minimum qualifications for the auditor, she wrote. And the council did not use the auditor to investigate concerns about Stenger.

Some council members recently questioned why Tucker remained on the job after 3 ½ years.

The council acknowledged it has supervised the position poorly and should consider taking action, including setting minimum qualifications and more clearly defining the auditor’s job description.

Note: The story was updated Wednesday to reflect the County Council's response came from the full council.