Coventry town officials went to the court in an attempt to get more documents from former town clerk, treasurer and delinquent tax collector Cynthia Diaz ahead of an audit scheduled to begin this month.
Town officials are trying to determine how more than $1 million went missing from Coventry coffers. Town officials believe Diaz is withholding documentation related to town finances, and filed a lawsuit against her to try to retrieve them late last year.
Following a hearing at civil court in Orleans County early this month, Judge Robert Bent issued an order last week for Diaz to deliver copies of all Coventry documents in her possession to the town by August 20.
Diaz has previously been ordered to turn over all documents in her possession in the case, but town officials contended the material she has provided was incomplete.
At the hearing on July 1, Diaz told the court she had destroyed a thumb drive that the town had identified as key in the initial lawsuit.
Asked by the judge about the thumb drive, Diaz said under oath that she had destroyed it.
Bent referenced her comments about the drive in his order, and said that the court can’t determine whether the files on the drive had been provided to the town before it was destroyed.
The judge clarified that Diaz must preserve documents going forward.
“To be clear, Defendant may not destroy any documents or files,” Bent wrote.
A follow-up hearing was scheduled for August 25. The judge said lawyers could go ahead and schedule sworn statements from witnesses.
Mike Marcotte, chair of the Coventry select board said he does not expect the town will get much more information from Diaz after the order.
“I think it’ll be interesting to see what she comes up with,” he said.
However, in the wake of Diaz’s admission at the hearing, he said he does not expect the town will be able to get the files he believes are most critical, which he and others believed were on the drive.
“I don’t think we’re going to get the thumb drive,” Marcotte said. “The information that was on the thumb drive was the most important piece of information we needed.”
Diaz did not return a call seeking comment. She is not represented by an attorney in the proceedings.
The town was seeking more documents ahead of a financial audit of the most recent fiscal year, expected to begin later this month. However, the audit may not proceed as planned.
Jeff Graham, who was slated to do the audit, spoke with federal investigators on August 4 and learned that he may be asked to serve as an expert witness in a criminal case in the future. He has done previous audits for the town.
Diaz has been reportedly been under scrutiny by the Federal Bureau of Investigation since last year.
At the meeting, federal officials “made it clear that they may be asking me to be in that position,” Graham said Friday.
Serving as an expert witness could potentially put Graham in violation of professional standards for auditors, who are required to maintain independence.
In Graham has suggested to town officials he instead put together a compilation report — a financial review process he said is very similar to an audit, but does not require the same strict standards.
The compilation report would be a public document, as an audit report is, he said.
Graham has already reached out of town officials about switching from an audit to a compilation report. The board is scheduled to formally decide whether to make the change at a meeting later this month.