SHOW ME THE MONEY!?

Council tackled two finance related topics during last Tuesday’s Committee of the Whole Meeting: the city’s 2019 budget and...in light of the circumstances surrounding Scott Coleman’s shocking resignation...employment of an outside accountant to conduct a forensic audit of the city’s books.

The Forensic Audit Discussion

I submitted a letter to the editor, as soon as the news about the Rep. David Joyce’s Federal Election Commission (FEC) filing broke, advocating that the city should conduct a forensic audit of funds that Coleman had access to/authority over when mayor.
https://www.cleveland.com/letters/2019/02/i-am-appalled-by-mayor-colemans-behavior-letter-to-the-editor.html

Council took up that discussion on Tuesday.

Naturally any discussion of possible financial impropriety in the city was uncomfortable for the city’s Finance Director, Joe Filippo. Filippo has always struck me as a straight shooter and a vast improvement over his predecessor.

Filippo pointed out that the state had recently conducted a biennial audit of the city’s books and had found no problems…it was a “clean audit”.

Later Filippo acknowledged that the state audit covered the years 2016-2017, not the most recent couple of years, when some of the embezzlement alleged in the FEC complaint purportedly took place.

Council President Stickan assured Filippo that:

“No one is saying that there were improprieties, it’s just our responsibility to make sure they didn’t happen.”

Filippo explained the difference between a forensic audit and the type of financial audit that the state conducts. He told Council members that it was up to Council to determine what the forensic auditor should look at:  how far back in time the auditor should go and which funds/financial areas they wanted to auditor to examine.

One topic that generated some heat:

 Filippo obtained proposals from two auditing firms. Those proposals suggested providing a verbal report to Council of the audit results.

Several council members objected to that.

Ward 1 Council rep Cathy Murphy made clear she expected to see a written report that would be shared with the public, “I want it on our website”. Acknowledging that it might cost more if the city had to pay for a written (versus oral) report, Murphy stated that she felt the cost was worth it, for the sake of transparency.

Filippo immediately acknowledged that the proposals reflected only suggestions from the auditing firms and that Council could receive a written report, “if that’s what you want”.

It sounded like the scope might be pretty focused because, according to Filippo, Coleman did not sign checks, drive a city car or possess a city credit card and the city typically keeps only $200 in petty cash.

Scope of Forensic Audit

The consensus on Council seemed to be having the forensic auditor look back 5 years, focusing on anything Scott Coleman had access to as mayor.

The Budget Discussion

The budget discussion focused primarily on the proposed capital improvement budget, which is the fund that pays for things like road replacement/repairs and other big ticket items like motor vehicles.

The service department will be purchasing a new snow plow truck in 2019. Residents appreciate having safe streets to travel in the winter, so there was no push back on that request.

Fire Chief Bill Turner requested money to purchase a new fire truck to replace a 29 year old fire vehicle.  While Council raised no objection to the purchase, there was discussion about Turner’s plan to keep a third, 21 year old fire truck as a backup vehicle.

Given that the city will have both a brand new firetruck and an almost new (5 year old) ladder truck at its disposal, Councilman Bob Mastrangelo questioned whether the city needed to spend money maintaining a reserve vehicle and whether the city could/should instead generate some income for the fire department by selling the 21 year old truck instead.  

Turner explained, to Council's apparent satisfaction, that since the city’s new fire vehicles are pretty sophisticated, repairs and maintenance can knock them out of service for extended periods. Turner felt that residents would be best served by having two working vehicles at the department’s disposal at all times, which is what having a reserve vehicle was all about.