Lanier - Audit findings

Odysseus Lanier, of Houston-based McConnell & Jones presents results of the management audit Tuesday, Sept. 5, 2017, during a Killeen City Council workshop at City Hall.

Just because the management audit of Killeen city finances is over doesn’t mean everyone packs up and goes home — accountability is next and ongoing.

Houston-based public accounting firm McConnell & Jones on Sept. 5 gave the city more than two dozen recommendations — fixes it said the city should consider to better safeguard public money and streamline municipal processes.

It’s up to City Auditor Matthew Grady to check on that progress.

+1 
Matthew Grady

Matthew Grady

“It’s the end of the (management) audit, … once an audit is completed, it shifts to the implementation and follow-up process,” Grady said. “It’s going to fall to me now to take the baton from McConnell & Jones and follow up on their recommendations.”

Seven areas were examined by the firm in an investigation authorized by the council March 14. Auditors said they found no fraud in the information they reviewed, but they identified problems with the way city administrators managed public money, including what the firm said was a lack of fiscal discipline, rampant overspending and lax oversight.

City administrators had not demonstrated sound fiscal management because expenditures outpaced revenues in the general fund every year since fiscal year 2008, the firm said in its report. As a result, the city’s fund balance, or savings account, decreased and debt increased.

Making sure changes are made in a timely manner goes back to Grady.

He will track the improvement with a matrix containing all of the recommendations, and the city’s responses to those recommendations. Grady will meet quarterly with City Manager Ron Olson and ask him to provide an update on how it’s going and what’s been done.

As issues are addressed, they’ll be closed out, and if there’s more work to be done, a timeline will be provided to figure out when changes will be implemented, Grady said.

That’s not all that will happen.

In a Herald interview Aug. 10, Grady, who is a certified forensic accountant and has experience in deep-dive, number crunching with the Department of Justice, revealed he had started an audit of city credit card use, and outlined his plan on four other areas in the next fiscal year.

These are the areas Grady is likely to include in his audit plans: the Killeen Police Department state seizure fund, city planning and funding for vehicle replacement, Killeen Civic and Conference Center liquor operations and city policies governing the authorization and use of compensatory time.

He started an audit of procurement cards, or city credit cards, which have been used since about 2012. Preliminary work began in April and May, and results are anticipated sometime this month, Grady said.

The city credit card system has never been audited as a program, he said. An audit of the Killeen Police Department’s State Seizure Fund is planned, but Grady has said he will hand it off to the Finance Department because it performed the same function last year.

A 2015 internal audit of the state seizure account showed problems with property records and case files that were incomplete or inaccurate, and showed the department failed to file a seizure case with the Bell County district attorney’s office. Those issues were said to have been corrected, a management response letter attached to the audit read.

The other two areas Grady wants to review have documented concerns, including large inventory variances in the past within the Killeen Civic and Conference Center, and past scenarios of lax enforcement within compensatory time for exempt city employees.

On Wednesday, Grady identified a sixth area he would like to tackle: Animal Services, a department under the Killeen Police Department.

Animal Services was in the headlines most recently during the second of two fiscal year 2018 tax/budget hearings last week, when residents publicly addressed the council about animal welfare at the shelter. Among proposed budget cuts are two vacant personnel positions in that department.

Among its past and current problems: the Sept. 26, 2016, resignation of a field supervisor officials said falsified government records and breached city ordinance when he orchestrated the release of a potbellied pig; reported overcapacity of animals; poor sanitary conditions; euthanasia practices; and funding.

Grady will have no help to get the work done in his office of one, but he’s ready.

“I’ve got my quill pen and my ink,” he said.

MORE ONLINE

Go to http://bit.ly/2wGmoEC to read the firm’s management audit report, see http://bit.ly/killeenfinances for more articles on how municipal government impacts you, and check out http://bit.ly/managementaudit for analysis of the management audit’s results.

asierra@kdhnews.com | 254-501-7463

(3) comments

eyewatchingu

Definition of an Auditor:
An accountant with an opinion.
or
Definition of an Auditor:
A person who only has opinion when you pay them.
or
What do you call an auditor who can't audit?
An or.

SnowWhiteNthe7Thieves

Why did Killeen choose a small, unknown audit firm? Why didn't Killeen choose a large, more well known audit firm? Did the city "auditor shop"? Was the city looking for what is called "CHEF AUDITORS", who cook the books to order???

Alvin

This is the personal opinion of this writer.

Copy: 'Just because the management audit of Killeen city finances is over doesn’t mean everyone packs up and goes home — accountability is next and ongoing.
Houston-based public accounting firm McConnell & Jones on Sept. 5 gave the city more than two dozen recommendations — fixes it said the city should consider to better safeguard public money and streamline municipal processes.
It’s up to City Auditor Matthew Grady to check on that progress.' End of copy.

We've city auditors before and we will continue to have city auditors in the future, 'But let's face it, the city auditor is just another city employee that has his pay check signed by a city manager, that in my personal opinion, has not done anything, yes I said 'anything' for the citizens of this city except lay the ground work for another 8 percent step increase for the public servants of this city, make a broad announcement that 'the city is embroiled in an iron clad contract with the/a water development organization, taken steps that will further reduce the infrastructure of this city, the pot holes will continue to get bigger and deeper, the public service of this city, meaning such city services as 'public swimming pools, senior citizen services, etc. will continue to deteriorate,and more and more housing starts will continue to be the given choice of the city administrative group.

Let's not forget that this new city auditor is 'just another city employee that takes orders'.

Now let's see, and I'll paraphrase here: 'Auditors said that did not find any circumstances of 'Fraud', but they did find problems with the city administrators 'managed public money'.

Mr. Grady, who is a 'certified forensic accountant' who should know all of the steps in accordance with forensic accounting principles, and should continue and improve on and in the tactics of the previously mentioned 'management services that we paid nearly $400,000 dollars for and to'. But what is his plan, and I again paraphrase: 'city credit card use, Killeen Police Department State seizure fund, city planning and funding for vehicle replacement, Killeen civic and conference center liquor operations, and city policies governing the authorization and use of compensatory time'. Nothing that relates to 'any type of fraud, or chicanery, or anything that is even closely related to these subjects.

So I again reemphasize, 'this man is a city of Killeen employee and as such, 'I do not think he will exhibit the full force of a 'certified forensic auditor that would be exhibited by one that was not under the thumb of someone who is responsible for that kind of service'.

Nothing has been said that relates to the city legal team 'destroying what could have been important documentation', or what is going to be the ramifications of the State law relative to such occurrences'. Is this to be another example of 'letting city servants off for such flagrant, and I deem this to be 'flagrant' offensives and accordance with a whole slew of other offensives.

Nothing has been said about 'anyone preparing a letter of resignation or of this city manager talking about layoff of said employees.

So nothing is changing in relation to the outcome of the $400,000 dollars that has been spent by this city for????

And finally this city has just been called out for enjoining some of the more 'popular forces' namely 'city developer agreement policy's, namely Bruce Whitis WB Development and Goodnight Ranch being developed by Reeces Creek Development, Ltd, just two of the names that has been called. Those are two of the more important items that should be pressed by this city council and not necessarily 'credit card abuses'.

Again, this is what councilman Mr. Steve Harris pointed to and was quickly squashed for his attempt. Bring it up again on another tone 'just like our state and federal government does. Let's not forget that 'we live in a democratic/republic form of government where the majority rules', not the minority. Support councilman Harris in this endeavor. Get something done.

Just remember what General Patton said in his movie, and I have to paraphrase here: 'If I can't get it done one way I'll fire the individual and get some one else who can'.

This has been the personal opinion of this writer and nothing shall be used, in context or without or changed in any way without first notifying, and receiving explicit approval from this writer.
One of the 4.58 % who voted.

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.