POCATELLO — New policies will be implemented for all city management following an audit by Deaton and Co. that examined the city's use of street department crews and equipment in other communities the past three years.

In a 7-page audit summary by Deaton released Thursday afternoon the report said: “Although there appears to be an abuse of authority, because of the nature of fraud, no assurances can be given that fraud does not exist. However, based upon the result of our examination, there is currently insufficient evidence to support the conclusion that assets were misappropriated.”

Pocatello Mayor Brian Blad said he was satisfied with the report.

“I think Deaton did the work within the scope they were asked,” Blad said.

In its audit conclusion, Deaton did mention the mayor's office and its role in approval of street construction in communities including Chubbuck, Driggs, Victor, Teton County, American Falls and McCammon without approval by the Council or signed agreements to reimburse Pocatello.

“During the investigation it became clear that various levels of management within the city of Pocatello do not fully understand their level of authority,” the recommendation section of the report reads. “There was confusion as to what authority the mayor held and what authority the superintendent held. There was also a lack of supporting evidence of communication between management and when to communicate with City Council.”

The findings also said: “...in the event the city wishes to address a need in another jurisdiction, and there are funds available to do that, the department head and/or mayor should bring the issue to Council, and if approval is given, the project should be memorialized by an inter-governmental agreement.”

The Deaton audit found the city paid at least $15,773.50 in labor for the benefit of other municipalities outside of city limits and incurred wear and tear for the use of equipment on out- of town projects during the past three years.

Mayor Blad said the city will not try to bill these outside communities for the work.

As far as new policies designed to stop future problems, Blad said the city is already drafting those.

“Those policies will be coming sooner rather than later,” Blad said.

New city policies will specify the responsibilities of management and set up safeguards and better communication between departments. Blad said one of the changes will be to create a better communication system between the city's finance and street departments.

Councilman Steve Brown said new policies were critical as well as the appropriate training for city department heads.

“There will be no doubt what anybody's role is when we're done,” Brown said. “There should be no doubt about bringing these issues before the City Council.”

Councilman Gary Moore said the audit shows there is a need to improve the relationships between the mayor and department heads and “at what point in time they have to come before the City Council.”

Moore said the audit was essential given what happened with the city doing projects outside of city limits.

“Absolutely, we had a situation where we needed a party outside of the city to take a look at it,” Moore said.

“It is what it is,” councilman Michael Orr said about the audit.

“New policies will stop this in the future up to and including termination for violations,” he added.

In its audit findings, Deaton said that work outside city limits was not isolated to the past three years it examined.

“The city has provided services to entities outside the incorporated limits for numerous years,” the report said. “However, there was no supporting evidence found disclosing the proper authorization of such services and the use of city assets during the period examined.”

The City Council formally requested an audit of street department activities since 2011 last summer after they became aware of the city's involvement in projects outside of Pocatello.