After six months of headlines, the resignations of two McKamey Animal Center leaders and a decline in donations, the city auditor has released findings clearing the animal shelter of any significant problems or wrongdoing.
The internal review did find that former Executive Director Karen Walsh's salary and annual $10,000 bonus weren't documented in the board's meeting minutes as they should have been.
But City Auditor Stan Sewell didn't find any financial concerns with the way Mc-Kamey runs its approximately dozen community programs or in the day-to-day operations of the shelter, which provides animal control services for Chattanooga through a $1.5 million annual contract with the city. In fact, Sewell found the staff and their policies within the animal center to be above par.
"The overall operations and controls seem to be more than acceptable," Sewell wrote in his report. "The key staff at [McKamey] appear to be very competent and dedicated."
With operational questions answered, the city is preparing to offer McKamey a new contract to update a 5-year-old agreement that was halted last year after Mayor Andy Berke's office requested the review. City Attorney Wade Hinton said he plans to give the contract to McKamey next week and hopes the council will adopt it before the June 30 expiration date.
Upon learning that Sewell's review resulted in no significant findings, Councilman Larry Grohn called the process a witch hunt, and he asked why the Berke administration chose to subject the nationally recognized nonprofit to such adverse publicity.
"I don't care how much money we give McKamey; they are a nonprofit independent vendor" not subject to such city oversight, he said.
Berke's staff defended the review, explaining that the findings revealed that the McKamey board did not consistently comply with open meetings laws and its own bylaws.
"For us it was a complete common-sense solution to have a third party come in to cut through the emotional stuff," said Berke's senior adviser, Stacy Richardson.
Board members said they have proof that the decisions on Walsh's salary and bonus -- totaling $107,000 in 2013 -- were made publicly in board meetings and that the secretary didn't know she was required to put the specifics in the minutes. The board is made up of volunteers with little experience in open meetings laws, said former chairwoman Ann Ball.
"Most of our executive meetings were at City Hall, with the city representative sitting in the meeting," Ball said. "We voted every time for the raises and bonuses."
Ball resigned in March as chairwoman, citing frustrations with working with the Berke administration and claiming that officials were slow-walking the updated contract. She also claimed that the bad publicity had cost the center thousands of dollars in donations.
But Sewell provided documents showing that donations had started to shrink in November 2012, long before the administration requested the review.
Walsh, who resigned in November to work for a national organization, Petsmart Charities, declined to comment on the findings except to say she has moved on with her new position.
McKamey, a nonprofit organization, has contracted with Chattanooga since 2008, running animal control for the Chattanooga Police Department as well as acting as an animal shelter and adoption agency.
Last summer, Berke administration members said they had received complaints about how Walsh's bonus was handled along with reports of fighting among board members. That's why the administration asked for an internal review.
McKamey board member Carol Goodman said she complained to the mayor's office that the board wasn't acting in the city's best interests in its decision-making. She questioned Walsh's bonus. The board then tried to kick Goodman off three times -- each time unsuccessfully.
Sewell's review concluded that changes on the board had resulted in improvement and "it appears dysfunction is waning." He said the board now has a strong focus on transparency and compliance.
He did, however, recommend that the city require more than one appointment to the board of directors.
Karla McKamey-Valadez, current board chairwoman and an early benefactor along with her father Bob McKamey, said she's excited about new director Jamie McAloon Lampman and McKamey's direction with the administration's support.
"We have a lot to look forward to," McKamey-Valadez said. "I've met with the mayor and he is very, very supportive. He's very happy about the changes that have been made."
Contact staff writer Joy Lukachick at email@example.com or 423-757-6659.