Friday May 9

City had a key role in theater's woes

Editorial

Whatever financial lapses occurred at the Palo Alto Children's Theatre, criminal or otherwise, it's now clear they happened under the city's watch, starting all the way back in 2001.

We hope administrators will investigate the city's role in allowing the financial irregularities with the same zeal police have exhibited in probing the children's theater itself.

While police continue trying to determine whether theater staff embezzled money or just carelessly handled it, police affidavits reveal that the city never received any receipts for purchases theater staff presumably made with city funding, provided by cash and cash advances.

The affidavits show that police suspect theater employees deposited more than $40,000 of that advance money into their personal bank accounts and withdrew slightly smaller amounts in traveler's checks over the years.

Today, about $10,460 remains unaccounted for. Receipts would have made it easier to account for that money.

City Manager Frank Benest has acknowledged the city failed to enforce its own policy of requiring receipts for all expenses - a basic requirement not only in the private sector but also in the public sector.

City officials have launched an administrative review into why receipts weren't demanded from the workers and other possible negligent oversight.

We hope this will turn out to be an isolated case - the theater is a unique aspect of city government, after all - and we hope city officials can confirm that when they complete the administrative review.

The city must be thorough in documenting its own handling of this matter.