You are the owner of this article.
watchdog top story

Councilman on Killeen audit: 'Stop playing games'

Earliest results moved to Aug. 29

  • 1

The Killeen City Council voted 6-1 last week to give the audit firm investigating city finances more time to finish its work, but in doing so, delayed public results by about a month.

The audit in its current form was approved March 14 to dig into seven areas the council deemed needed deeper examination, to find out what could have caused years of overspending and upside-down budgets, and to look for fraud, if any. In June 2016, residents learned the city was short nearly $8 million, even after drawing down on the city’s reserve account over the recent years.

Residents who filled Council Chambers last fall during budget hearings and demanded answers are still waiting.

THE LATEST

After meeting in closed session twice June 27 with Houston-based accounting firm McConnell & Jones, the council announced a delay of at least two weeks, rolling back the earliest the public would see results from July 31 to Aug. 15.

+3 

Odysseus Lanier, of Houston-based McConnell & Jones, left, shakes hands with Councilman Jim Kilpatrick during a Killeen City Council a closed meeting at City Hall.

The next day, on June 28, city administrators and auditors met to go over the audit, after the council gave it a green light.

In that meeting, documentation still needed to complete the audit was discussed, City Auditor Matthew Grady said in an email.

“It was at that time that M&J (auditing firm McConnell & Jones) decided it would be best to request an extension to the end of the month to ensure that they had sufficient time to gather and analyze the remaining documentation,” Grady said.

A June 28 email to Grady from McConnell & Jones partner Odysseus Lanier says Grady, Lanier and City Manager Ron Olson met that day and agreed to the new dates, according to a copy made public by the city on its website. Lanier invoked the third component of the contract under “Term,” which says the firm will “continue until the performance promised by Contractor is complete.”

At the center of the decision to grant an extension was what Mayor Pro Tem Jim Kilpatrick described as an “extensive data submission” by the city. Neither Kilpatrick nor Grady explained what it was — whether documents were piled on by city staff or whether auditors learned of leads at the last minute.

+3 

This is the handwritten note by Mayor Pro Tem Jim Kilpatrick about an extensive data submission by the city to public accounting firm McConnell & Jones.

On Tuesday, a 6-1 council vote granted an extension of a month from the original date; there was no new cost.

“I don’t care if it was one week ... I don’t like political games,” Councilman Gregory Johnson said Thursday. He cast the lone opposition vote.

“Why are you just now coming to council saying you have too much information? What information did you need? Why didn’t you come back to the governing body?” he said.

+3 

Killeen Councilman Gregory Johnson outside of a June 2016 Killeen Community Center event.

Johnson called it a “protest vote” and a vote of no confidence — not just for the decision to give the audit firm more time, but in the process as a whole.

“If (residents) don’t trust me with their money, I can’t expect them to buy into initiatives,” the councilman said.

His message to city administrators: “Stop playing games.”

Johnson alluded to some city personnel with a hand in the audit procedure, but did not provide specifics.

Olson initially said he would stay out of the process, but told the Herald on June 16 he needed to be more involved.

“I wish I could stay out of it … I can’t stay out of it,” Olson said. “I’ve got to be able to cooperate, provide information.”

Olson became involved because of what he said was an unclear council focus.

“My whole thing on the front end was simply to add clarity. If you can be specific about what you’re asking, then they can target in and give you an answer … and you can reduce your costs a little bit,” he said. “(But) I think we need to be really clear, I have no dog in this hunt. I have no interest in manipulating an outcome or engaging it anyway.”


UNDER THE MICROSCOPE

In the agreement authorized March 14, the council asked McConnell & Jones to examine seven areas:

— Capital outlays from fiscal years 2006-2016

— Use of bond money from fiscal years 2002-2017

— Interfund transfers from fiscal years 2010-2016

— Pay increases from fiscal years 2014-2017

— City/developer agreements from fiscal years 2002-2016

— Private roadway ownership from fiscal years 2002-2016

— Spending during the post-recall of the council period from November 2011 to May 2012

Although federal grants and expenditures are not among the seven focal points, City Manager Olson said auditors could include the handling of federal money if questions were raised during the course of the investigation.

WHAT WE KNOW

Breaches in financial reporting protocol and improper accounting were pinpointed in federal grants management in at least 2008, 2009, 2011, 2012 and 2014, city documents and recent Herald articles show.

A separate report, reviewing Killeen’s 2011 fiscal year by Temple-based public accounting firm Brockway, Gersbach, Franklin & Niemeier, showed financial information was inaccurate for a state energy program grant, as well as two fire department and emergency response grants. Go to the Herald’s April 16 article at http://bit.ly/2uwdZRV and July 2 article at http://bit.ly/2sIZCxf to read more about it.

McConnell & Jones hasn’t been vocal about what it’s detected, but initial observations made to the Killeen City Council May 2 noted defective communication and a lack of transparency that had left council members and residents in the dark on city finances. Spending decisions were made with fragmented information, auditors said.,?? auditors said??

Residents expressed concerns about past city management decisions regarding fiduciary oversight, public accountability, policies and the proper use of funds, some shown in past internal audits to have been irregular.

In July last year, residents were reeling from news their city was about $8 million short of a balanced budget and managers had been overspending for three consecutive years.

+3 

Killeen residents fill the room at a City Council public hearing concerning the city's budget in the fall 2016.

Go to http://bit.ly/2viuDVo to read last week’s article on the audit, http://bit.ly/2sIZCxf to read about prior audits that showed how public money was misused by the city, and http://bit.ly/2sIJj3f to find out about additional documents that raised questions about city spending.

Go to http://bit.ly/2uwdZRV to read the April 16 article about Mayor Pro Tem Jim Kilpatrick’s denial of past problems within city finances.

See http://bit.ly/killeenfinances to catch up on #KilleenFinances coverage.

asierra@kdhnews.com | 254-501-7463

(1) comment

Alvin

This is the personal opinion of this writer.

Copy: 'Residents who filled Council Chambers last fall during budget hearings and demanded answers are still waiting.' End of copy.

Waiting and waiting and waiting in the never ending transcription of what this council, what this city management can, and will do, in this never ending city management, cause and effect that never seems to materialize. Is it because of the translucent of this city government that in the case of an audit has gone one for over 4 years now and is still be withheld from the public???? Is it because of this city manager who promised 'big things are going to happen???? Is it because of the nature of this city management clinging on to 'a form of government that because of the very nature of the architecture of the city charter that this very nature of what will be will be????

Copy: 'The Killeen City Council voted 6-1 last week to give the audit firm investigating city finances more time to finish its work, but in doing so, delayed public results by about a month.' End of copy.

Where do you find in the contract between this city and 'the contractor' that 'one: any delay in the schedule there will be a penalty imposed'. No where I the text of this contract, on either side. Right after the first mid cycle meeting where the contractor was very clear, at least to my way of thinking that there was, very prominent 'departures from what expected to be performed and what was performed'. Shortly thereafter it was announced, the day before a mid cycle review, that the company asked for, and was granted, a two week delay and extension of the final company review of this city and the 'management audit' of this city. When the mid point of audit cam, there was not anything viable that came out of this meeting, in fact it was conducted in approximately 10 minutes from start to finish. When the final reading was conducted, it was conducted 'behind closed doors' which the way this city has now wished to conduct the meetings of any importance and now we still do not know 'what this management audit has concluded. Now this council 'has granted' another two week extension, so the conclusion now stands at 4 weeks delay, at least that's what how it stands now, but who knows, it may very well be another 4 weeks, and another 4 weeks until we the citizens of this city bet tired of waiting. And that would be just what this city wants. The city can crow 'we won again'.
It's been known that this city management is known for 'not telling the whole truth' time and time again so why would they do anything different this time????

Copy: 'Residents who filled Council Chambers last fall during budget hearings and demanded answers are still waiting.'

Continuation of copy: 'A June 28 email to Grady from McConnell & Jones partner Odysseus Lanier says Grady, Lanier and City Manager Ron Olson met that day and agreed to the new dates, according to a copy made public by the city on its website. Lanier invoked the third component of the contract under “Term,” which says the firm will “continue until the performance promised by Contractor is complete.” End of copy.

It's this very thing that I would point out to this city council: 'In my personal opinion, this is and was a poor way of administering a performance contract. Delay, Delay, Delay. This not only pointed at this city but at the contractor as well.

Has there been any money's transferred between this city and the contractor???? If I am to understand the term's of the contract, only when certain end points are obtained would there be a transference of money. I do not believe that that has occurred yet. It should be only when the citizens of this city 'sees' the final report would there be what would be known as 'a completion pf contract. Then and only then would the contract be termed as completed.

We only have, at the most, a couple of council persons that I personally believe is knowledgeable in the arts of city management. The rest only want to 'have meetings to resolve personal grievances.

This council person who has took a stand to realign this city management by calling for a 'review of the 2013 proceedings that caused this city to align itself with the JB Whitis company, allow the construction of 3,,750 future homes, outside of the city limits, and cause this city to go in bondage for millions of dollars, and the city would not be entertaining any future profits for such an exchange, only what the city would entertain from the local merchants. I am in total agreement with is city councilman. This entails what would be considered 'an investment' of certain individuals who would stand to make money.

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.