According to a news story in the Aug. 20 Arizona Daily Star, the city’s Industrial Development Authority is investigating the Downtown Development Corp. The two entities, using taxpayer funds, became partners in two downtown parking lots and it now occurs to the city that some of the funds seemed to be inadequately accounted for.

Well, yes, the way the Downtown Development Corp. was operating the lots, even if every nickel was properly applied, no one would know it because the lots were run with about the same accounting standards as a kid’s lemonade stand.

The parking lots generate all cash. The money from customers is just dropped into boxes and collected. It is then taken to the home of the man running the Downtown Development Corp., Doug Kennedy, where he counts it, hoping not to attract robbers. The proceeds are then deposited into a bank.

Kennedy handles about $200,000 a year that way. All cash — public money. This has been going on since the mid-1980s.

According to the Star, Jaime Gutierrez, president of Industrial Development Authority, has been asking Kennedy for records for years. Kennedy says the authority already has most of the records it is asking for and what it doesn’t have, he will turn over. Sounds a lot like these records might have to be "found."

The operations of both entities warrant investigation.

If Gutierrez has been asking for the records for years without getting them, he is far too patient. And, he complains, he can’t even find out who is on the board. All of these questions should have been answered long ago.

The things people blurt out without thinking sometimes reveal quite a lot. In describing why the initial agreements concerning the two lots were changed in 1995 combining revenues from both lots and splitting them equally, Kennedy is quoted as saying it was "a silly process to account for every nickel and dime" that came in. Silly? That kind of accounting is exactly what Kennedy should have been doing. That’s what he was paying himself $45,000 a year to do.

The cash should never have been taken to his house. If it had been stolen, who would bear that loss? It should have been taken directly to a bank, counted there and deposited.

There is always a suspicion that goes with handling significant amounts of cash. Most people would refuse to do it for that reason. Most people would not want to be responsible for handling cash.

Surely, there must be methods of collecting payments that automatically and securely account for the funds electronically. We put a man on the moon decades ago. There must be a system that would eliminate suspicion - suspicion which may be completely unwarranted.

And then there’s the matter of a $907,000 advance from Industrial Development Authority to the Downtown Development Corp., the application of which seems to be unclear to say the least.

Kennedy is reported to have said that money was "not a big deal .... I haven’t paid attention to those little details."

It sounds big enough to me. It was supposed to have been repaid. Now it is unclear what happened to it. But one thing is certain, it was not used to repay the city.

This raises the questions:

Is the acquisition and operation of parking lots within the scope of the authority of these two corporations?

Do we need two such entities to run these parking lots?

Do we need any?

Why are taxpayer funds being used this way?

It is inconceivable that private investors wouldn’t have been willing to buy those parking lots and operate them with private funds.

There has been a lot of money handled here and the accounting seems to be deficient.

Gutierrez appears negligent in protecting the Industrial Development Authority’s interests. And Kennedy has yet to answer for the application of all those funds.

It would be a tragedy if there turns out to be no basis for suspicion. But that is the inevitable result of accounting for cash that can only be called sloppy.

E-mail comments for publication to editor@azbiz.com. Contact Lionel Waxman at territorial@waxmanmedia.com. Waxman’s Flashpoint commentaries are published in The Daily Territorial.