

With findings spanning decades, a forensic audit of the City of Yukon has identified significant problems related to prior administrators, including unauthorized transfers of funds, the diversion of $185,000 to an unusual nonprofit, the sharing of “hardcore” pornography, an avoided investigation of inter-office sexual encounters, and an overpayment of nearly $35,000 in vacation benefits to a former city manager at the heart of the examination.
Retained by the Yukon City Council in September, North American Forensic Accounting prepared the 82-page audit, which comes amid ongoing changes in the 27,000-person city’s leadership.
Michael Breon of the Pennsylvania-based firm said his team identified significant concerns regarding the city’s “organizational tone” and expanded the audit’s scope as more matters came to light.
“The governance aspect was one of the worst I’ve ever seen, if not the worst,” Breon told the Yukon City Council on Tuesday night. “Some of these issues, some of these behaviors, continued for 30 years or thereabouts. It tells a big story, in that there weren’t any investigations, that people were afraid of retaliation — afraid of bringing this up — and that nothing was done for that period of time. That says a lot.”
Speaking by Zoom, Breon spent an hour outlining the audit’s findings and another 30 minutes answering questions from members of the council. He said Yukon’s city managers exhibited “poor leadership” for decades and that city employees were unempowered to discuss concerns.
“We believe that prior senior-level management simply failed to lead by example,” Breon said. “Unfortunately, in our review of former senior-level management, we found emails that contained hardcore pornographic material as well as what I’ll refer to as normal — if it can be normal, I apologize — general pornographic material. And that was transmitted to various other city employees. That was of concern, again, because as I talked about the importance of tone at the top — leading by example — transmitting the photos that I’ve seen is a complete breakdown of that.”
After Mayor Brian Pillmore took office in May 2024, the council terminated City Manager Tammy Kretchmar, who had succeeded her longtime boss, Jim Crosby, in 2021. While Crosby and Kretchmar are only named in appendixes, the audit report makes references to “senior officials” during their lengthy tenures with the city.
In a statement, Pillmore said the audit examined concerns raised by former council members, city employees and lifelong residents of the Canadian County community.
“Many had tried to raise these issues before but were ignored. Their courage helped confirm the need for a forensic review,” Pillmore said. “What we’ve found through this process is disappointing but not surprising: breakdowns in governance, controls and accountability that allowed serious issues to persist. Some of the most troubling findings include the inappropriate ‘on the job’ sexual relationship between a city leader and an employee, the misdirection of city funds into a nonprofit organization, and the misuse of city resources, such as fuel, city facilities and employees being directed to perform personal errands.
“These incidents occurred within a governance and control environment that was woefully inadequate — enabled by those who either failed to report what they saw or whose concerns were ignored. Such behavior not only violated trust but also left the city vulnerable to further harm.”
Pillmore said the audit’s findings and recommendations will allow Yukon to “turn the page” and move forward. After receiving Breon’s report, the council unanimously approved a resolution about structural reforms and a contract with Lighthouse Services to reestablish the city’s “concern hotline,” which auditors said had been eliminated years ago when it became viewed as a “tattle line.”
“The days of tolerating dishonesty, mismanagement and exploitation are over. Starting with a city council resolution and under the leadership of our city manager, we are building a culture of integrity, accountability and transparency,” Pillmore said. “Transparency is not always comfortable, but it is essential. We have a duty to seek the truth and hold ourselves to the highest ethical standards. Those who abuse power, steal or harass others have no place in this city. We owe it to our neighbors, our children and our legacy to lead with integrity. When one of us takes a stand, it inspires others to do the same.”
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‘Peculiar’ nonprofit gets $185,000 of ‘diverted’ funds
While not named in specific findings of the Yukon forensic audit, the tenure of former City Manager Jim Crosby appears to be the focus of many findings. Crosby served as Yukon’s city manager from 1994 through 2011, and again from 2016 through 2020. A national search followed Crosby’s second departure, and the council promoted Kretchmar from within.
Kretchmar, who declined to comment on the audit because she said she had not seen it, was fired in 2024 after Pillmore said she told him the city treasurer’s departure two months prior meant bank account balances were unavailable for review. Council members hired Mike Castro as city manager, and on Tuesday they voted for him to hire a new finance director. Pillmore also mentioned the ongoing shift of city accounts away from Yukon National Bank, a change carrying its own community controversy.
One of Oklahoma’s fastest-growing cities, Yukon has faced public concerns about city financial practices for at least a decade. In 2016 and 2017, the FBI and Oklahoma State Bureau of Investigation examined reported fiscal issues, but then-District Attorney Mike Fields announced in 2019 that the inquiry “did not find evidence of violations of state criminal statutes.” Specifically, Fields declined to bring charges against former City Manager Grayson Bottom, who held the position between 2011 and his “forced” resignation in December 2015.
The city’s 2015 audit had found “inadequate accounting for and tracking of assets,” but Breon told council members Tuesday that many issues identified in that audit remain unaddressed.
“Those findings need to be followed up on, and my recommendation is that any future findings, obviously, be remediated immediately,” Breon said. “These repeat findings are critical in my mind.”
Crosby, who was hired as city manager of Chickasha in November, did not respond to requests for comment prior to the publication of this article.
Among the financial concerns discussed in the audit, Breon highlighted the Yukon Community Support Foundation, a nonprofit organization established by Crosby in 2021. For years, Crosby served as one of three board members governing the nonprofit, which purportedly existed to support benevolent city activities, such as Yukon’s Christmas in the Park, Rock the Route and Freedom Fest events.
However, the audit released Tuesday said cash donations citizens may have thought they were making to the city were sometimes diverted to YCSF. Similarly, large payments from INTEGRIS Health for advertisement on Yukon’s water tower ended up with YCSF instead of the city.
“It was discovered that this advertising money did not go to the city but was deposited into the YCSF bank account,” Breon wrote. “We also obtained an internal city email that directed the diversion to take place. In total, we identified $185,000 of diverted INTEGRIS advertising funds.”
Breon called the situation “peculiar” and said it “raised some questions in our minds.”
Councilman Rodney Zimmerman asked Breon if he had ever seen similar arrangements between cities and nonprofit organizations led by city managers.
“Not like how this is set up, no,” Breon said.
Breon expressed similar concern about how contracts were awarded over a period of decades.
“We found that at least two of the high-dollar vendors had not been bid since back in the 1990s,” he said. “One had never been bid (…) and we found another vendor that, while although relatively new, continues to win the bid year after year after year, and these services are not unique. That causes us to raise a red flag. Why is that? Why can these other bidders not win?”
Selby memo: ‘I will not authorize a full investigation’

At times, Tuesday night’s Yukon City Council meeting grew tense, with Councilman Adam Shriver confronting Councilwoman Shelli Selby about a September 2020 memo she wrote dismissing allegations that Crosby and an employee had engaged in “on the job” sexual encounters. Yukon’s mayor is selected among council members, and Pillmore was selected to succeed Selby in that role last year.
When auditors reviewed “rumors” of the relationship and how the city handled the allegation, Breon said they found handwritten documentation of the situation, as well as Selby’s memo. Saying she personally conducted a “pre-investigation review” of the allegations as mayor, Selby unilaterally deemed them “unfounded.”
“The allegations are years old and occasionally resurface and get repeated. I further find that the city has taken reasonable steps to investigate the allegations and to determine if there is any truth to the allegations. I further find there is nothing to support or substantiate any of the allegations. There are no formal complaints filed, no written statements, no witnesses, no evidence of favoritism shown or any other evidence of any kind, to justify a full investigation. There are only bare, unsupported allegations that without some facts to support the allegations could be unfairly damaging to other employees’ reputations and careers,” Selby wrote. “As a result of this pre-investigation review and the finding of no evidence to support the allegations, I will not authorize a full investigation and expose the city’s valuable, hardworking employees to public humiliation, embarrassment and criticisms that could and would result.”
Shriver called Selby “under-qualified” to investigate the allegations and suggested she was “ethically obligated” to make a report to law enforcement.
Saying she believed she was qualified to review the situation herself, Selby insisted the relationship was “not sexual harassment” and instead involved “sexual encounters of two mutual adults.” Despite saying she did not want to speak about the situation without an attorney present, Selby suggested that someone was terminated following her review.
“There was reprimand,” she said. “The vice mayor asked for it to be investigated, and there were consequences that came out for that individual.”
Shriver noted that “the report doesn’t show any of this.”
“I think that is as unethical as that possibly gets with that kind of allegation,” Shriver said. “That is my opinion, and I bet a lot of these women feel the same way.”
Breon said his review of the situation found that “a lot of folks knew about this and about this taking place on city property and on city time.”
“Based upon what we’ve read, based upon the interviews that we’ve conducted and based upon our finding of these handwritten notes, we believe there would have been sufficient evidence to actually undertake an investigation in that case,” Breon said. “The failure to adequately investigate them put the city at risk (of) lawsuits. It also [concerns] culture, and it’s also a great example of how leadership — poor leadership — can destroy an organization.”
During closing remarks of Tuesday night’s meeting, Selby said she appreciated the “good conversation” about city leadership.
“Remember, all of the things we’ve heard tonight happened over many many years, many city managers and many city councils,” she said. “But Yukon will come out stronger.”
Vice Mayor Jeff Wootton, who was censured by a 3-2 vote of the Selby-led council a year ago for alleged involvement in labor negotiations with the Fraternal Order of Police Lodge 173, said the city needed sunlight on the situation to see how to move forward.
“There’s a lot of things in Yukon’s recent past that have been brought to light, and it was time for us to acknowledge those things,” he said. “It’s time for us to turn that corner, fix things and move on.”
Pillmore said after the meeting that “both state and federal prosecutors have been made aware of the details underlying the report,” although he said it’s unclear whether the Yukon Police Department, OSBI or the FBI will conduct a criminal investigation.
Tuesday night, Canadian County District Attorney Tommy Humphries declined to comment on the Yukon audit, but he did say “a criminal investigation has not been given to us to review.”
Key findings in the City of Yukon forensic audit include:
- The city lacks core governance documents, including a code of conduct, code of ethics, and conflict of interest policy, resulting in unclear standards for accountability and behavior;
- Employee concerns have been dismissed without adequate investigation, including allegations of misconduct on city property;
- Failure to implement prior audit recommendations, including incomplete cash reconciliations, inadequate fixed asset controls and missing internal control documentation;
- Significant anomalies in budgeting and fund transfers, including unauthorized fund transfers and inappropriately filed budget amendments with the Oklahoma State Auditor and Inspector’s Office;
- Diversion of $185,000 in City of Yukon funds to the Yukon Community Support Foundation without proper authorization or transparency. Some of the diverted funds stemmed from INTEGRIS Health’s advertising agreement regarding the city water tower, as well as cash handling concerns from the annual Christmas in the Park event;
- Misreporting of personal income earned from the personal use of city vehicles and allegations about use of fuel in personal vehicles. Auditors said the allegations were supported by irregular fuel usage patterns and testimony from employees and inappropriate personal use of city personnel and assets by senior officials;
- Overpayment of $34,895 in vacation benefits to a former city manager, based on undocumented practices;
- Absence of formal investigative policies for employee concerns, with whistleblower mechanisms and a compliance line being discontinued out of a belief that it had become a “tattle line”;
- Lack of regularly updated competitive bidding for high-spend vendors, some of whom have maintained long-term relationships with the city dating back to the 1970s;
- Missing bidding documentation for significant contracts, highlighting deficiencies in oversight and transparency;
- Critical gaps in information technology controls, including no audit trail for digital archives, a lack of badge swipe tracking for physical access and no server or network activity logging;
- Delays in ordinance codification and incomplete documentation in official systems, which contributed to legal and compliance risks; and
- Ambiguity in public employee sales tax fund usage, including unexplained monthly draws into the city’s General Fund, which were not sufficiently documented or authorized.
Read the City of Yukon forensic audit
(Update: This article was updated at 11:45 a.m. Wednesday, Jan. 15, to include additional information.)
