Killeen City Council members agree on the need of a forensic audit to answer continuing questions about the city’s troubled finances.
However, the process is in danger of getting hijacked in what appears to be an attempt to divert attention from the current city administration.
That’s because some council members are seeking to expand what should be a narrowly focused, short-term investigation into a probe dating back to 2006.
Rather than focusing on recent troubling financial practices — such as transferring money across funds and questionable reimbursements — a 10-year audit would seem to be an open-ended fishing expedition designed to take the focus off interim City Manager Ann Farris and former Mayor Scott Cosper, who is currently seeking the District 54 seat in the Texas House.
Cosper, who completed his term as mayor in May, maintained throughout the spring that the city’s financial health was in great shape.
Yet, just six weeks after Cosper left office, interim City Manager Ann Farris told council members they would need to find about $8 million to balance the 2017 budget — a shortfall she said she had just recently become aware of, despite the fact that she had overseen the city’s finance department for the previous three years.
In her presentation to the council, Farris noted the city’s fund balances had been declining for several years. Expenditures outstripped revenues in 2009, 2011, 2013, 2014 and 2015.
Knowing that, it would be reasonable to authorize an audit looking at 2013, 2014 and 2015 — the consecutive years with declining balances.
However, investigating the city’s finances back to 2006 — based on figures Farris provided showing a $6 million shortfall that year — ignores the fact that the city had surpluses in two fiscal years subsequent to that date.
Further, the 2006 budget issue was largely related to the city’s $5.5 million purchase and renovation of the former First Baptist Church. A single high-dollar project, authorized by the council, is hardly reason to audit the city’s finances for the entire year.
Just as problematic is the makeup of the panel tasked with setting an audit in motion. The audit committee, comprised of Mayor Jose Segarra, Councilmen Juan Rivera and Jonathan Okray, is authorized to give the council guidance relating to the forensic audit — including helping to write the request for proposal, or RFP, that will go out to firms vying for the audit contract.
This setup has conflict of interest written all over it.
Segarra, Rivera and Okray all served on the City Council during the past four years — a time period that the audit would cover. As such, they have a vested interest in a broader investigation.
Moreover, Support Services Director Stu McLennan will be in charge of finalizing the RFP document. As he works closely with Farris, he should be replaced on the committee by someone who has no ties to the interim city manager. Also, considering that McLennan failed to report an $89,000 City Hall repair project to the council last fall, he should not be in a position to determine the scope of an audit of the city’s finances.
The council’s obvious decision should be to authorize a narrowly focused audit looking into major expenditures and fund transfers dating back three to five years. If significant questions remain, a broader audit could be considered at a later date.
Future councils are under no obligation to continue the process, so authorizing a wide-ranging audit increases the odds that an investigation won’t be completed.
Certainly, the city’s taxpayers deserve to know exactly what happened to their money over the past few years. It’s also important to determine what procedures and practices contributed to the budget mess, in order to take corrective actions going forward.
However, it’s just as important that the council recognize that although the current budget crisis didn’t happen overnight, it didn’t take a full decade to develop, either.