Is this all there is to the Carr, Riggs & Ingram forensic investigation, or is someone putting me on. WAS the Manager given the real report because the copy I was given is scandalous in its brevity. If Churchill were given a copy he would likely say that never in the history of Port Orange was so little delivered to so many who had been promised so much.
When the Parker/Shelley and Barnhart fiasco came to light last fall Taxpayers were promised that answers would be forthcoming in the form of the $30,000 report being conducted by Moore Stephens & Lovelace. When it became obvious that report complete with those infamous non-recorded depositions was bought and paid for by the former Manager wholly and solely to serve as cover, for the sweetheart retirement arrangements that were made, Taxpayers were again promised that answers would be forthcoming in the form of a 2nd $90,000 forensic report by Carr, Riggs & Ingram.
That CRI report is threadbare at best, and it raises more questions than it answers. For $90,000 taxpayers should have received a 300 page report complete with analysis, charts, cross checks and depositions in support of their fee……instead of a 15 page letter containing only 10 pages of vague findings and boiler plate recommendations.
The most pressing question coming out of this threadbare report is WHO SPOKE WITH CRI AND GAVE THEM THE IMPRESSION THAT A REPORT THIS DEVOID OF DETAIL WOULD BE ACCEPTABLE ???
This report is going to be trouble for Council as they come to realize they should not have been swayed by the siren call of a ‘consultation’ report and contracted instead for a FORENSIC AUDIT. An audit would have required the auditor to express a professional opinion on something, i.e. …. To ATTEST as to a particular subject matter, AND this sorry report does no such thing. In fact the report concludes with one heck of a disclaimer “ While the results of our testing did not identify misappropriation of City assets, we do not assert that irregularities or misappropriation did not occur……… should misappropriation have occurred, the records /documentation may not exist to provide the City with substantive evidence to pursue further action “
$9,000 per page capped of with this kind of a disclaimer is good work in you can get it, AND if it can be gotten anywhere it will be in Port Orange for sure.
At this point I do not know how Council is going to even attempt to suggest to Taxpayers that this report provides any of what was promised including:
*) an accounting of all taxpayer losses.
*) identifying those individuals whose nonfeasance, misfeasance or malfeasance caused those taxpayer losses.
*) identifying those individuals who failed to provide adequate supervision and or implementation of adequate internal controls.
*) identifying specific internal control deficiencies, AND specific recommendations to correct those deficiencies.
This report does none of those things and right off the bat Page 2 advises that it does not include “any valuation of revenue loss associated with defective or dead meters “ Who told CRI they could un-concern themselves with defective meters ? This and other omissions all but ensures that action against the previous Auditor will never be undertaken. Who has been making these decisions ?”
Nor does this report comment on the actions of any city employee including those who remain in senior responsible positions from the Parker administration, including the Comptroller and Assistant City Manager, the Directors of IT and HR, and the Managers of Purchasing and Meter Reading . Given the breakdown of internal controls across multiple departments shouldn’t this engagement have assessed their competence and integrity ?
A case in point on Page 9 deals with computer security which apparently is so defective it is commented on in a separate non-released “IT sensitive report .” Exempting information regarding security systems from sunshine is sanctioned by law as it should be, HOWEVER Taxpayers deserve to know if the IT Director is flat out incompetent, OR if he is as good as they come and that he made all the right recommendations to strengthen computer security over the years and his boss the former Manager told him to be quiet ?
Nor does this report list specific deficiencies or their remedy beyond generic boilerplate recommendations and on Page 14 it abandons all pretext of doing even that by advising that “ A comprehensive evaluation of access controls should be performed for the Finance department.” The report doesn’t suggest who is to do that evaluation but if the CRI people are angling for more business they should be told to forget it.
And what of the payroll fraud which appears to have been both well organized and concealed and which should have been turned over to the States Attorney’s office for investigation by now. Weren’t we given repeated assurance that CRI’s scope of services would be expanded if required by subsequent events ? Didn’t the Manager assert that he had done exactly that in the wake of the payroll fraud scandal that led to the resignation of the Utilities Director ? If I misunderstood, and the Manager did not refer this to CRI then who is investigating the payroll fraud ??
What the report does tell us is that the City has still not implemented fundamental audit recommendations made years ago regarding customer service data access and customer utility billing, AND it is not even following its own procedures for follow-up on zero-consumption meter reads. Why is that ??
Even more disturbing is the report of controls regarding check stock, manual check machines and electronic signature plates that are so glaring a freshman police explorer would need sunglasses, AND THAT apparently escaped the attention of Stella Gurnee, Wayne Saunders and Greg Kisela right up to “ the start of the CRI investigation” THIS IS IN-EXCUSABLE and it is not the former managers fault. Stella Gurnee has been the Comptroller for a decade, Wayne Saunders the CFO since January and Greg Kisela has been the CM since March 1st after two months with training wheels.
This in totally unacceptable and begs the question posed long ago. Who Is Responsible For The Design, Implementation and Monitoring of Adequate Internal Controls in Port Orange ? In the private sector that is a rather easy question to answer…… A competent CEO, CFO, and Controller.
The City had no such competence in the days of Parker, AND we will not improve this situation one iota until we honestly answer the fundamental question. Do Gurnee, Saunders and Kisela possess the requisite audit and financial knowledge and savvy to Design, Implement and Monitor internal controls adequate for a city with a $65 million budget and ¾ of a $billion in assets ?
Tell me exactly which of them have CPA and Maters in Finance and Accounting degrees, AND the exact work history of each, that would have provided the audit and financial skills required ? BECAUSE call me old school but I sure do not consider experience gained in the Military, the Embry Riddle accounting department, a decade working under John Shelley, and 25 year old experience in the accounting department of a town that 25 years later is only ½ the size of Port Orange, anywhere near adequate for the task at hand.
This report provides scant information beyond what was already known, and leaves more questions unanswered than it answers. Something is just not right about the way this whole Taxpayer scam has been handled since the firing of Warren Pike over a year ago. The questions raised in that police investigation, the subsequent Civil Service Board hearing and since have never been answered.
That cannot be by accident And that stonewalling itself needs to be the subject of its own investigation…or recall election !!
Early on and throughout this process the Mayor was asked if he was looking for a mulligan and he answered an emphatic NO – HE WAS GETTING TO THE BOTTOM OF ALL THIS. Well if he has he is the only one.
IF THIS CRI report is accepted as is it will be as big a fraud on the Taxpayers of Port Orange as the fraud CRI was hired to investigate in the first place.