The Killeen City Council reached consensus Tuesday to pursue an investigation into city finances, but the method is not entirely what residents have been calling for.
Residents have demanded a full forensic audit of city finances. The plan set before the council deviates from the original request by choosing to focus on seven points.
As a perceived lack in fiduciary oversight and weakened public trust overshadow the local government, the “management audit,” as City Auditor Matthew Grady has described it, leaves some parts out.
Councilman Richard “Dick” Young did not agree that it is the best type of audit, but supported moving forward.
The draft of the contract with Houston-based McConnell & Jones will examine:
– Planning and quality control ($34,708)
– Capital outlays from fiscal years 2006-2016 ($62,492).
– Use of bond money from fiscal years 2002-2017 ($84,448).
– Interfund transfers from fiscal years 2010-2016 ($32,176).
– Pay increases from fiscal years 2014-2017 ($22,751).
– City/owner agreements from fiscal years 2002-2016 ($36,692).
– Spending during post-recall period from November 2011 to May 2012 ($34,892).
A midaudit briefing at $10,092 and the written report with findings and recommendations at $34,432 bring the total to $394,456, which includes travel and miscellaneous fees, according to a city presentation.
Residents sought a forensic after the council learned in June the city would be $8 million short in its budget, and city data show it had been overspending for three consecutive years.
Residents were concerned about delayed financial reports, money being shifted among funds to cover daily operating expenses and a lack of transparency when financial questions to then-City Manager Glenn Morrison were not answered.
After the council solved the shortfall, city administrators identified $5 million to remedy a 2018 budget problem through “reprioritization of expenditures” and “managerial practices,” raising even more questions.
The council will vote formally at its next regular council meeting on Tuesday to enter a contract with McConnell & Jones, despite former Mayor Dan Corbin’s insistence against it.
Corbin appeared before the council as a guest, given the floor by Councilman Young.
Corbin, who was mayor from 2012 to 2014 and recommended Morrison’s hiring as city manager, used an on-screen slideshow to refute key points made by residents, financial experts previously interviewed by the Daily Herald, and the city’s own data, exceeding his allotted speaking time to finally suggest no criminal wrongdoing is to blame for Killeen’s past or present situations.
“(And) if you proceed with this expenditure, I expect the final results this summer will not reveal ... dishonesty or deceit,” Corbin told the council.
“I fear that the net result will be, Killeen will have $394,000 less in their bank account.
“Killeen will still be subjected to criticism by the Killeen Daily Herald and other ill-informed citizens,” he said.
This was not Corbin’s first appearance. He appeared with four other former mayors in support of Morrison when Morrison received his job evaluation last March.
The former mayor served one term, and has been a vocal opponent to a financial investigation. Some of his leadership, as well as others who served, could potentially be scrutinized.
Residents have previously said that rampant speculation about possible underhanded dealings is corroding faith in the city’s financial decisions.
Past internal audits show some city policies and use of funds to have been questionable or irregular.
“(My constituents) are fired up,” Councilwoman Shirley Fleming said. “I think we do need to give the citizens what they’re asking for.”
An up or down vote is set for Tuesday.
If approved, the firm would begin its work the week after the contract is signed.
The audit is officially described by the city as a management audit, and it is a hybrid made up of a risk-based analysis to examine financial controls, with forensic accounting components to test for fraud and gross mismanagement.
It would also determine the extent of the city’s financial losses, if any.
A midaudit report is expected as well as written findings in a final report.
The project’s timeframe is four months at a cost of $394,456.