You are the owner of this article.
watchdog top story

Killeen residents will see audit results, city manager says

  • 9

Whatever the results may be of an investigation of Killeen city finances, the findings will “absolutely” be made available to the public, City Manager Ron Olson said Friday.

Olson raised concern June 6 when he told the auditors he expected the city to review the documents first. Although Olson did not work at the city during the years under investigation, several current city management employees did, and they handled finances during those years.

+2 

Killeen City Manager Ron Olson talks about his progress while visiting at the Killeen Daily Herald offices, Wednesday, May 17, 2017.

Houston-based public accounting firm McConnell & Jones was hired to examine whether fraud played a role in the city’s downward financial spiral, which included several years of city administrators spending more money than the city had taken in.

The firm raised additional concerns June 6 when auditors were expected to provide a mid-audit briefing, but provided little information about the audit while council members asked few questions. The public later learned Olson asked council members to be cautious in their questions to the auditor.

Olson, in an interview with the Herald on Friday, addressed concerns of manipulation in the audit process.

“Nobody here has attempted to influence (the firm) one way or another. We give them the information they ask for, that’s it,” Olson said.

After the report is handed to the city, the administration will agree or disagree with the findings, “but their findings are going to be their findings,” he said.

City Auditor Matthew Grady, who like Olson was hired this year, is the liaison for the city with the firm. On Friday, Grady said the firm remains on track. Aside from noted challenges finding older documentation to support expenditures, “they’re getting the information they need.”

Councilman Steve Harris, who is on the audit subcommittee headed by Mayor Pro Tem Jim Kilpatrick, is looking forward to the subcommittee’s next meeting on Tuesday. It has not met since February.

+2 

Steve Harris

The committee will discuss how the firm will present its draft report.

When Harris was asked whether he was satisfied with the firm’s two progress updates so far, he said: “Nowhere near close. We’re still missing a mid-audit report.”

Auditors gave a progress update to the council May 2, at the request of former Councilman Richard “Dick” Young, and again June 6.

Although Olson is not in the position to oversee the audit’s progress, he said responsibility rests on the council’s audit subcommittee to let the firm know whether it is satisfied.

“Giving a report to the audit committee seems to me to be a big deal,” he said.

The city manager acknowledged the uniqueness of the audit, which he called unusual, and acknowledged the process has not been clear.

When McConnell & Jones came to the council for the first update, it could have done so differently, he said.

“That turned out to be, in my view, a misinterpreted, unprofessional report,” Olson said. “(The auditor) responded, basically, ‘we don’t know for sure, but we think.’”

There was no context to the firm’s observations, Olson said.

“Why would you say that? Why would you speculate about what the outcome is going to be? Get the outcome; get the facts; get the truth,” Olson said. “That makes no sense to me.”

Unlike Olson, many observers were relieved auditors announced initial observations May 2 by indicating, among several things, that bond funds were used for unauthorized purposes, and that enterprise (moneymaking) funds were transferred to another fund to buy vehicles not used for the benefit of the respective enterprise fund.

Before getting information May 2, the public lacked confidence in the firm. McConnell & Jones responded to a forensic audit bid by saying it would not do one, and instead sold the council on a management audit.

The council chose the firm over two competitors with extensive forensic auditing experience.

After McConnell & Jones provided little information June 6, questions remain about whether auditors will seek relevant documents, interview key witnesses and provide important information to the public. The audit’s completion is expected at the end of July.

When Olson cautioned the council in a memo to limit its questions of the firm, he intended to curb questions that would have caused the firm to speculate, he said.

“I stand by that,” Olson said. “We shouldn’t be encouraging them to speculate. We should be encouraging them to do a thorough, professional job of auditing and tell us the facts.”

Olson said it was important to him for auditors to identify anything wrong so he can fix it.

“As far as trying to manipulate the outcome of this thing ... if that’s even an impression on your mind or anybody else’s, that is absolutely not the case.”

WHY ARE WE HERE?

Public perception and trust tanked when city administrators failed to share news of declining city finances, kept it quiet for years and then finally pulled the curtain back on a heavy $8 million budget shortfall last summer.

Overspending from at least fiscal years 2013-2016 was visible in lopsided budgets, and although the city came close to balancing the fiscal year 2016-2017 budget and began work on 2018, it left in its wake a trail of questionable financial decisions with little or no explanation.

The council hired McConnell & Jones for $394,456 to examine seven areas of interest, approved in a 5-2 vote March 14. Those include: capital projects; bond money usage; interfund transfers; pay increases; city/developer agreements; roadway ownership; and post-recall spending.

asierra@kdhnews.com | 254-501-7463

(9) comments

Pharon Enochs

The following comments are indeed the opinions of Pharon Enochs First I want to ask Alvin to stay in the mix. We are only a few frogs croaking on the banks of this slime covered swamp but we can a heck of a lot of noise. Then before you realize it more frogs have joined the choir. I had stated in a prior posting I felt it was wrong for Olson to stick his nose in where it did not belong this being the audit. His memo to the council in my opinion cast more of a chill on getting to the bottom of the mismanagement of public funds than there was before he send his memo to the council. If I WAS A MEMBER OF THE COUNCIL OR A MEMBER OF THE AUDIT COMPANY i WOULD BE INSULTED BY HIS REMARK ABOUT NOT WANTING COUNCIL QUESTIONS TO THE COMPANY REPRESENTATIVE TO CAUSE THEM To speculate in answering their questions. I would like to think the council and staff researched and vetted the company as professionals and wold act as such in doing what the contracted between the council and the company and did not need Olson's input or output. I think Olson fell very short in his efforts to explain why he felt a need to stick in his two cents. He was quick to point out he was not here at the time some of the things being looked at by the audit . He was also quick to point out some of the administration personnel were here. This kind of confused me was he trying to protect these people or was he saying I was not involved but they were blame them not me. It seems to me I would be more concerned why the company had not talked to these personnel and other former council members and employees who were here at the time. I would also be concerned about documents which could not be located instead of saying they may have been destroyed as their required time for retention had expired. Does he know this for a fact or was he SPECULATING? From the start the idea of what caused the money matters for the city has been problematic . It started out with the idea of having an audit which had many naysayers saying nothing is remiss within the city coffers. Many of these were former and current members of the council. as well as former mayors. When the audit was approved it was not the type audit requested by the citizens but one far less detailed which was approved by the council. There remained several disgruntled council members who stood hard fast against the audit. Even at this late date is does not appear as if all the T's were crossed in planning for the audit. The city formed several committees concerned with the audit up upon till now have done little if anything to foster the successful completion of the audit. Olson stepped in again on how the audit should be presented.. He was again outside his lane as far as I am concerned. I believe he wanted the audit to be reviewed by the city council and others and the way I under stand have some discussion on the findings before it was presented to the full council and the citizens. If I read correctly he wants to call it a type of document that is exempt for a short period of time from the freedom of information act. There apparently was an assumption the company would present the audit to the city council since the contract was between the council. Thanks to Olson and his desires this may change and it will be presented perhaps to a council committee and who knows whoelse. It should of been something simple if it had been decided who, what,where,when and why prior to not just before. So here we go again a chill over the audit results why not just be out front and honest get it open at a council member and let it be public and the whole world of nature to see not looked at in a back room with the doors locked and window blinds closed.. This only cause more distrust by the citizens, placed the council on guard and continues to cheapen the image of the city. Perception becomes reality seems too fall on deaf ears in Killeen The City With No Limits. I would like to look at the city's motto in a positive way but as of now in my opinion there is not much to be positive about. A long time friend of mine who lives in another state asked me if there are poachers in Killeen who have their fingers in the dikes surrounding the city trying to keep from draining the swamp because of the fear of what is hidden in the swamp will be revealed I hope not but i would not faint if it was true but either way good or bad the swamp needs draining. God bless America, President Trump, the City of Killeen and it's great people, and John Wayne wherever he maybe.

Alvin
Alvin

This is the personal opinion of this writer.
It's just that we are In a city that has in excess of 130,000 citizens. No correction, people, I really don't know how many of them are citizens, but anyway, for the past approximately 4 years, we have had only 5 or 6 of us making comment to this newspaper and how this city conducts itself. Why????
Here recently the city manager has been talking about the 'worth' of this city's contract's and how we should just knuckle down and 'pay this city's debts'. Well I don't feel that way and certainly don't want to be making payment on a contract that was on voted on by 2 people that obligates this city to pay for something that is not within the city limits. Where was the council then????
Now it's been observed that this city manager and city auditor were not even employed by this city and they are the ones that are 'directing traffic' now.
This option of letting the ad hoc committee 'direct traffic' for an audit that should be within the realm of this entire city, and we are putting up with it, well it just doesn't fly with me.
First, professional business, and this city should be considered a business, does not allow a professional contract or obligation to be under the guise of an 'ad hoc committee' that is to 'direct traffic' or tell the contractor what is to be in the contractual document such as 'the audit'. They get to 'see' the document first and can 'direct' the contractor to put into this document, what they desire. Professional business when opening a bid or as in this case an audit, should be the domain of the entire city council. They are the ones obligated to pay this bill not an 'ad hoc committee'. It should be such that the bid, or document in this case is 'opened in front of the in open session of the entire city council' and nothing short there of. Are we going to function as a business or not????
But we are a minority of just a few people who have anything to say about the conduct of how this city functions, or doesn't function as the case may be.
I have sent two letters to the Texas Attorney General's office and one to the FBI. I have also concluded, in the newspaper articles, that when I talked about the town of Borger, Texas and how back in the early 30's I think it was, the Texas Rangers were called in because the town was lawless. My suggestions are falling on deaf ears and so the city of Killeen will continue to operate in their normal fashion. I would like this citizens of this city to show some interest in the operation of the city they live in.
This has been the personal opinion of this writer and no attempt should be made to convey any thing other than my personal opinion.
One of the 4.58 % who voted.

eyewatchingu
eyewatchingu

@Alvin , no one is mad at you. I opinion it means someone is thinking. Smile I rather have an intelligent disagreement then have to talk to a fool with none.
Well Here is my point, I have a strong feeling the city of Killeen is going to find their budget 20mil short if Mrs. Teel signs the lawsuit papers she started!

Alvin
Alvin

This is the personal opinion of this writer.
Well I'm calling it quits. I know some of you are ticked with me, but I've tried to keep people 'on the subject', but no more.
This city just, in my opinion, have the spunk it takes to drive home the subject in hand. Well from now on, I'm calling it quits.
One of the 4.58 % who voted.

Alvin
Alvin

This is the personal opinion of this writer.
Well I'm calling it quits. I know some of you are ticked with me, but I've tried to keep people 'on the subject', but no more.
This city just, in my opinion, have the spunk it takes to drive home the subject in hand. Well from now on, I'm calling it quits.
One of the 4.58 % who voted.

Alvin
Alvin

This is the personal opinion of this writer.
@eyewatchingu: Just what has this to do with the article posted last night and relating to the 'fact or not the fact' of the audit and whether or not it is going to be put forth as I out lined in this article or whether the key (buzz) wording of:
Copy: 'Whatever the results may be of an investigation of Killeen city finances, the findings will “absolutely” be made available to the public, City Manager Ron Olson said Friday.' End of copy.
This is a big deal. The fact that the citizens who have or will pay the audit firm a document that will be opened in a sealed condition in front of the 'called to order' city council and viewed in such conditioned, sealed and unopened or whether it passes in front of 'a committee whose chairman and at least one additional member is hostile to the fact that an audit was called for in the first place. Go for option one: 'The document is to be opened in open session in front of the entire council'.
Copy: 'Olson raised concern June 6 when he told the auditors he expected the city to review the documents first. Although Olson did not work at the city during the years under investigation, several current city management employees did, and they handled finances during those years.' End of copy.
Again, this condition is not to be allowed, the citizens paid for this audit, it is only right that this document be opened in 'open session of the city council'.
Copy: 'The public later learned Olson asked council members to be cautious in their questions to the auditor.' End of copy.
Why would he do such a thing 'if' he ha not been 'pressured' by 'others' to intervene?
Copy: 'Olson, in an interview with the Herald on Friday, addressed concerns of manipulation in the audit process.' End of copy.
What was the justification for Olson, who was not present for the duration of the entire 'fiasco' to intercede in what is to take place now, he wasn't there.
Copy: 'After the report is handed to the city, the administration will agree or disagree with the findings, “but their findings are going to be their findings,” he said.'
In this intercession, this subcommittee, this city management is of no consequence. This is the matter of this council agreeing to conduct an audit involving, perhaps, 'some' of this city's past or present, or both city council, city mayors, and those in responsible charge of this city's monetary obligations and the fact that 'this city is trying to find out the truth, period, and they can't be assured of this happening 'if' the audit findings are 'held in confidence' by a third party 'instead of the opening of this sealed document in front of the council in open session'.
Copy: 'City Auditor Matthew Grady, who like Olson was hired this year, is the liaison for the city with the firm. On Friday, Grady said the firm remains on track. Aside from noted challenges finding older documentation to support expenditures, “they’re getting the information they need.” End of copy.
This is the kicker, 'Aside from noted challenges finding older documentation to support expenditures'. That is saying a mouth full isn't it????
Copy: 'The committee will discuss how the firm will present its draft report.' End of copy.
There is again. In one sentence, he says that the city, and the council, will absolutely see the the document, 'but not before it is handled and possibly mishandled' before it is shown to the public.
Copy: 'The committee will discuss how the firm will present its draft report.' End of copy.
Again, Olsen states that the city is going to be the chance 'to see the document, 'but not before the committee gets it's hands on it'.
Copy: 'Although Olson is not in the position to oversee the audit’s progress, he said responsibility rests on the council’s audit subcommittee to let the firm know whether it is satisfied.' End of copy.
Once again Olsen is denoting that 'this Sub-committee is going to get first dubs on the entire document first before the council has the opportunity to see the document in it's unaltered state'. This should not be.
Copy: “Giving a report to the audit committee seems to me to be a big deal,” he said.' End of copy.
Yes it is a big deal. The citizens of this city have been pondering 'What happened' for approximately 4 long and ponderous years and when they finally get the go ahead to conduct an audit, to all facts and conditions, this city is 'trying to stand in the way' of finally achieving it's goal'.
This is the personal opinion of this writer:
'People of Killeen, do not let this city government stand in the way of finally achieving what you have been standing for for all of these years. Do not back down now. Stand up for what you think and feel is right'.
End of personal opinion.
One of the 4.58 % who voted.

eyewatchingu
eyewatchingu

Well the city of Killeen might want to brace itself, it may see it self 20 million shorter. Mrs Teel Hired is going to sue.

Alvin
Alvin

This is the personal opinion of this writer.
Copy: 'Whatever the results may be of an investigation of Killeen city finances, the findings will “absolutely” be made available to the public, City Manager Ron Olson said Friday.'
Continuation of copy: 'After the report is handed to the city, the administration will agree or disagree with the findings, “but their findings are going to be their findings,” he said.' End of copy.
At this stage, I will register a “NO” to the proceedings. Mr Olsen has stated, and I paraphrase here, 'This proceeding is and was not handled in a very professional manner'. In this I disagree with Mr. Olsen. In this respect I don't see anything that even comes close 'to being conducted in a professional manner. You don't 'give the city administration copy of the final presentation of the audit, nor give the sub committee the copy of the audit, you give it in a sealed envelope, with the packaging unbroken, to the open session of the city council there to be witnessed by each and every councilman/woman. You pass it around to each of the council people to witness this is the copy of the audit completed by the McConnell & Jones organization to verify it's authenticity. Then copy can be made if sufficient copy is not prepared by the auditor, copied and distributed to each and every council person, the city auditor, the city manager, the city clerk for filing purposes. Then and only then, when each council person has read through the document can comments be made.
You don't handle a bid solicitation in the manner similar to what is going to take place here, you 'open a bid I the presence of all interested parties and then and only then do you proceed to open sealed bids. This should be handled in the same 'professional' manner.
Copy: 'The firm raised additional concerns June 6 when auditors were expected to provide a mid-audit briefing, but provided little information about the audit while council members asked few questions. The public later learned Olson asked council members to be cautious in their questions to the auditor.' End of copy.
This has been, in my personal opinion, handled in the same 'unprofessional manner' as with every thing else, off the cuff, sent by email discussing who and what should be asking questions, and the matter of the 2nd briefing, and boy was it brief, they said 'nothing'.
Copy: 'After the report is handed to the city, the administration will agree or disagree with the findings, “but their findings are going to be their findings,” he said.' End of copy.
How does anyone consider a copy of the audit report that is 'handed to the city administration' names of people or persons that the audit is to handed to, 'is to be nameless'. Who is the person, by name, will the audit be handed to???? Is it to logged in and signed for by the person or persons that take possession of this document???? Is the name or names of the person or persons that the document, in a sealed envelope, box crate, whatever the means of the final document will be in for transfer of the final document???? No, I say, if the city is to have ant credence over the audit, it must be handled in a open and above board manner otherwise it will be just a waste of $395,000 dollars and we will have to go over it again this time with someone who knows document handling procedures.
Copy: 'Councilman Steve Harris, who is on the audit subcommittee headed by Mayor Pro Tem Jim Kilpatrick, is looking forward to the subcommittee’s next meeting on Tuesday. It has not met since February.'
Continuation of copy: 'The committee will discuss how the firm will present its draft report.'
Continuation of copy: 'Although Olson is not in the position to oversee the audit’s progress, he said responsibility rests on the council’s audit subcommittee to let the firm know whether it is satisfied.' End of copy.
In my personal opinion, this is the 'WRONG' move to have 'the committee' discuss how they want 'the firm' will be preparing the final report. You're going to be stating to a group of professionals what, when, where, and how by a group of 'UN-professionals'. This is in aspects, 'having the cart leading the donkey'. We are spending $395,000 dollars to have a audit report completed by a professional organization who we have entered into a contract with, so that organization should have the responsibility to give us a final report in the fashion that see fit. After all, is that not what we are paying good money for, not some 'committee' to discuss what the format will be, how it will be presented and to what degree the final report will be.
Copy: 'The city manager acknowledged the uniqueness of the audit, which he called unusual, and acknowledged the process has not been clear.' End of copy.
In this I agree with Mr. Olsen. 'the unusual and whole process has not been clear'. This is about the single most thing I can agree with Mr. Olsen on, ' a misinterpreted, unprofessional report'.
Copy: “As far as trying to manipulate the outcome of this thing ... if that’s even an impression on your mind or anybody else’s, that is absolutely not the case.” End of copy.
To recap: The citizens of this city have been stifled, in the dark, not told the whole absolute truth, keep in the dark, and in general put in a corner where mushrooms grow for entirely too long.
In my personal opinion, if this report is not handled in a professional manner as discussed above, this city is just leaving itself wide open to having it said, 'well they did it to us again' and the mistrust will just continue to grow. This city should proceed in a very professional manner, as I have said, keep the document in what ever form, sealed until it can be opened, or UN-sealed in open session of the city council, and when opened, pass it in front of the city council and when this activity is completed verifying it's contents, then it can be taken out for copying. We need complete openness in the handling of this document and nothing short of this will be acceptable.
One of the 4.58 % who voted.

eyewatchingu
eyewatchingu

why would one even think this is going to be an honest and transparency when Mrs. Teel has proof all over her facebook [page of the lies and cheating going on just in the elections? We wont to know was Mrs Teel on the ballot, or did you all just leave her name on and even if she won, she wasn't going to be allowed to hold office. Tell the truth. Because the truth is all over her facebook page. Check it out for your self people https://www.facebook.com/holly.teel.507/videos/217725428747936/

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.