Killeen residents have a right to wonder what’s going on with the investigative audit into the city’s finances.
After a detailed report from the audit firm, Houston-based McConnell & Jones on May 2, there has been a decided shift in the atmosphere surrounding the audit process.
That initial report to the council, in open session, was a real bombshell — offering a list of troubling observations, including unauthorized use of bond funds, inconsistent planning for capital projects, misapplication of pay raises, and creation of an escrow account to transfer funds.
But after a June 6 briefing that contained very few details and last week’s closed-door session between the City Council and audit firm, the degree of transparency has notably diminished.
From the outside, the optics don’t look good, especially after City Manager Ron Olson sent an email to council members warning them not to ask too many questions of the auditors at the June council briefing. Olson was no doubt being cautious, not wanting auditors to feel obligated to make definitive statements in the face of an unfinished audit.
The audit is still not completed — in fact, it will require an additional two weeks to finish, beyond the initial July 31 target date. But it’s a safe bet that council members were asking pointed questions of investigators behind closed doors last week. The only difference this time is that the public couldn’t hear the answers.
The contract for the audit is between the audit firm and the council, so it’s understandable that council members would expect and receive a status update behind closed doors.
But a meeting between auditors and city staff members the following day is problematic, especially since some of the administrators receiving what was described as a “more detailed briefing” were involved in the city’s financial dealings during the period the audit investigation covers.
City Auditor Matthew Grady said the meeting’s purpose was to provide more information for auditors so they could have a clearer perspective on financial procedures and policies.
However, that information could just as easily be obtained through Grady, who is the designated liaison between the city and the auditors.
Meeting directly with city staff members before the investigative process is complete damages the audit’s credibility and raises questions about transparency.
Giving the staff a detailed briefing may be seen as a courtesy on the part of the audit firm, and certainly it’s important to rectify whatever procedural or accounting problems have been identified so far.
But meeting with staff while the audit is in progress has the appearance of offering the city a “do-over” so that any harsh initial findings can be softened or revised before the final report is issued.
It’s the equivalent of an employee getting to see his job evaluation in advance and work on the problem areas before the actual sit-down with the boss.
To date, the audit process has been marked by poor coordination and communication.
It’s hard to say whether that is a reflection on McConnell & Jones’ relative inexperience in conducting audits, or whether the council and staff have been sending mixed messages to the auditors.
But at this point, what the auditors have found and what they have been told is open to speculation.
Auditors promised a detailed midaudit briefing, as called for in the contract, for which they were to receive $10,000. After June’s brief council update, they said the midaudit briefing hadn’t yet taken place. Then they said it had but it had been renamed.
Council members and residents alike were left to wonder what happened.
Auditors also said they were having problems finding some older documents for their investigation, but until last week, they hadn’t talked to any former city department heads or supervisors who were in place during the time period of the audit. Are they going after the necessary information, or not? And if not, why not?
Then after last week’s closed-door meetings with the council and the Audit Advisory Committee, it was announced there would a delay of at least two weeks before the council could view the audit’s final results.
Auditors claimed the extra time was needed to process “an extensive data submission” by the city.
Mayor Pro Tem Jim Kilpatrick, who also chairs the audit subcommittee, would not say what the data was or when it was submitted.
What’s the new data, and how is it likely to impact the final audit report?
If council members know, they aren’t talking, at least not publicly.
So residents are left wondering exactly what the completed audit report will say — and what it will not.
Whatever the final conclusions, it’s incumbent on the auditors to clearly spell out the issues and problems they identify — and not feel compelled to walk back or soft-pedal their May 2 report to the council.
The last thing the city needs is to spend $400,000 in taxpayer money on a report that says a five-month audit found some problems, but they weren’t as bad as first thought, and what was found was fixed. So really, there’s nothing to see here.
That said, it’s entirely possible the audit will uncover some significant problems in its seven key areas of investigation and report them in detail.
With all the secrecy surrounding the audit process these days, it’s impossible to say which scenario to expect.
But barring another delay, we’ll have our answers in about six weeks.
Until then, all anyone can do is offer speculation, and there’s plenty of that to go around.