A budget amendment to pay for the coming management audit and risk-based analysis of Killeen finances unanimously passed Tuesday, but not without questions and pushback primarily from two council members who had voted against it.

Councilman Jim Kilpatrick, a vocal opponent of the audit and chairman of the subcommittee charged with giving direction to the audit firm based on council recommendations, and Councilman Juan Rivera, each laid out similar lines of questioning toward Finance Director Jonathan Locke.

Locke fielded inquiries from several council members about how funding the coming audit would impact the fiscal year 2017 budget, but Kilpatrick and Rivera were the most direct.

“Will there be any services cut, or ... positions affected by the use of the money?” Kilpatrick asked.

“No,” Locke said.

Council members approved the coming audit March 14, hiring Houston-based public accounting firm McConnell & Jones for $394,456. Because the scope of the audit mainly affects the city’s operating account and two utility enterprise accounts, each will be tapped to provide a portion of the money.

Here’s the breakdown: The general fund will pay 70 percent ($276,119), Water & Sewer will pay 20 percent ($78,891), and Solid Waste will pay 10 percent ($39,446).

An amendment to the general fund reserve was approved for $216,687 because $59,432 was already budgeted.

The audit will examine seven key areas and attempt to answer questions about how the city got into financial problems.

“Let me put a little bit of different flavor here,” Rivera said. “Will any of those departments that we’re getting the money from, will they suffer during the rest of the year in their budgeting?”

Locke responded by explaining where the funds are coming from: fund balance.

“It’s actually not coming from a department’s budget ... so there is no impact to any departments,” Locke said. “This is a one-time expense as far as I’m aware, so we will take it from fund balance in FY 17, and FY 18 budget will be a completely different thing.”

Councilwoman Shirley Fleming spoke in favor of funding it.

“It’s like an investment for the city,” Fleming said. “It’s like an investment in giving credibility to the city of Killeen. So I think this is a good thing.”

Councilman Jonathan Okray also said he supports the audit to find out what happened, because “process and procedures” are what drive expenditures, he said. The investigation would dig into that component, among other things.

The results of a separate yearly financial statement audit were accepted by the council Tuesday.

No previous yearly city audits have raised flags or concerns, but none were as in-depth as the new audit, which is a strong reason to proceed, some council members have said.

asierra@kdhnews.com | 254-501-7463

(6) comments

Alvin

This is the personal opinion of this writer.
@Mongo260: Good to hear from you. Now as to 'how the departmental structure is incorporated', if as you say, 'the city maintains an unallocated portion of the budget, per the city's policies, called the reserve fund', then I must as the question, 'How much does the water department or the solid waste funds have as a budgetarty reserve as this has already been tapped at least once that I'm aware of'. And to my mind, your statement that 'This is where the city is pulling the money from'. Isn't that in essence 'still the funds of a department reserve regardless of what pocket it is coming from???? That to me 'is Nit Picking' saying it's coming from the unallocacated money that is in the departments reserve'????
So that posses the question, 'Then where did the $5 million dollars that was 'Found' come from, what bucket was it taken from and what bucket was it assigned or returned to'????
The analogy of $5.00 was just that, an analogy, but it served the purpose of 'what is going on with this city's finances and in general, the finance department' as it must still be taken from someplace within the city's budget.
Could you endeavor to clear that up please. I and a whole lot of other citizens would be intrested in this.
One of the few who voted.

Mongo260

To answer the question, "How is this not coming out of individual department budgets?", the city maintains an unallocated portion of the budget, per the city's policies, called the reserve fund, to maintain their credit rating. You may recall during the last budget cycle all the controversy surrounding "drawing down" the reserve fund. This is where the city is pulling the money from.

Alvin

This is the personal opinion of this writer.
@VetA42: I'll try to give some of the answers as to what I know about this whole adventure. First I think your analogy as to if you have $5.00 dollars and for some/any reason, spend some of or all of this money you don't have anything left. That's just common sense to practically everyone, but this city. They seem to have some money making mechanism in their back pocket, so if the city spends some of the funds it has available, they just crank up thia machine to make more and depending on what drawer the take it from, they can always make more by pulling from either the solid waste fund, or the water fund and genewrally it ends up in the general fund where everything seems to be materializing from. This seemed to hasppen in the spnding of the millions they took from the solid waste fund to transder it to the general fund and from the water fund just to se it spent on the KPD. If these funds are so fruitfull, then why is it that it not passed on to the citizens in the form of a rebate check or a reduction in payments.
And I also agree with you in 'what it takes for a citizen to become a city councilman/woman, and It seems to me that when a council pewrson, they were voted to represent the citizen and as such, the council person holds office 'at the whim of the citizen'. Ou don't represent yurself, but that of the citizen and thus you should present yourself in that light. One o our illustrous council persons made a statement much in that order and I paraphrase here: 'The citizen voted me in to represent them and as such, that is what I'm doing'.
And yes I also conclude that yu are correct, It is not for someone else to provide 'the spin' on who, what, when, or where the proceeds of this city government went or by what route these same funds went.
As to w\'who is pulling the strings for any managerial activity, no I have not been able to determine that as of yet.
And no am sorry to say that I have not been able to assess as to what extent the fornula for assessing the Stillhouse Hollow Lake adventure is to take as nobody wants to talk about this facit of the water plant structuring, but your guess is as good as mine as to what indebtiness will take place as apparently they did not place the bids for a 'total package'.
And @dailymajor: ' It's beyond me how they consistently pull this off. You know, for the last 4 or 5 years, they haven't been 'pulling it off' annd have gone to the wishing well to generate some of the additional funds that have materialized.
One of the few who voted.

VetA42

This is so much double talk about where the money comes from. If You have $5.00 in you're account and spend, transfer or otherwise give it towards another than it affects your account ask any bank!!
Next did the Citizen of Killeen get who the audit firm is doing the audit for correct yet?
Seems like they believe the Killeen City Council is hiring them when in fact the Council is doing Citizen Business. By virtue of who is footing the expense to pay the audit firm than the Killeen Citizen should be kept in the reporting process loop so the information is first hand and not some political assessment or spin on who did what and where the money went.
Has any member of the Killeen City Government explained the How, Why and Who is the Authorizing Signature(s) on this second City of Killeen owned by two identified and a number of unidentified individuals?
If a true audit was conducted this issue should be in the front of why this arrangement was ever approved along with the Stillhouse Water Supply Structure
Seems like way too many past Mayor's, Council Members and who knows the others that totally benefitted from this unannounced project until a few day ago????

dailymajor

Spending this huge amount of money now is absolutely absurd, and spending this money now won't effect this year's budget? How in the world is that possible? This is really crazy.

Alvin

This is the personal opinion of this writer.
Copy: 'A budget amendment to pay for the coming management audit and risk-based analysis of Killeen finances unanimously passed Tuesday, but not without questions and pushback primarily from two council members who had voted against it.' End of copy.
First let me say that this naming of the 'Management Audit and Risk-braced Analysis' is a misnomer from the word go.'
Continuation of copy: 'Council members approved the coming audit March 14, hiring Houston-based public accounting firm McConnell & Jones for $394,456. Because the scope of the audit mainly affects the city’s operating account and two utility enterprise accounts, each will be tapped to provide a portion of the money.
Here’s the breakdown: The general fund will pay 70 percent ($276,119), Water & Sewer will pay 20 percent ($78,891), and Solid Waste will pay 10 percent ($39,446).' End of copy.
Again, 'Where the money going to come from'???? If, as Locke says, “It’s actually not coming from a department’s budget ... so there is no impact to any departments,” So are all of the departmental budgets so over inflated that the money is not going to come from a departments budget, then 'WHY' do we have a budget in the first place, just allot a certain portion of the excessive amount of mmoney that is called a budget and be done with it. Why did we use, for lack of a better word, the monies are to come from these particular funds, 'General Fund; Water & Sewer Fund'; Solid Waste fund'. These are all of the favorite places to seek any funds, my words, the inappropriate fund mismanagement. Why has the monies from the solid waste fund, as a for instance, being tapped for the millions and then say 'this money is not going to come out of budget money'. The same goes for the 'general fund and the water & Sewer' funds being treated in the same generalized way????
And why has a certain individual who is on the council and running for office again saying 'he is for the audit' on Monday night and then on Tuesday night proclaiming 'he is against it'. First he wll and then he won't. So is it the 'Rob Peter to pay Paul syndrone', or 'Where's the pea syndrome, being used, again in this effort???? I would guess so.
Once again, this has been a presentation of my personal opinions only, but I have offered some, I think. Inportant questions that begged to be answered.
One of the few who voted.

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