There’s plenty of interest in today’s Accountability and Oversight Committee meeting at City Hall. It starts at 4, and you can watch it on Metro TV.
State auditor Crit Luallen is getting the rock star treatment, and Kelly Downard’s committee is anxious to hear just how bad things were in the Metro Housing Department. Luallen is expected to further illustrate the screw-ups in the department.
The Metropolitan Housing Coalition, which advocates local housing policites, is urging citizens to attend the meeting.
Luallen received the following list of questions from members of the Council. It’s the only item on today’s agenda, but it doesn’t seem like an hour will be long enough to get through the list.
1. Explain the state requirements of when the State Auditor’s office must audit Louisville/Jefferson County Metro Government.
2. Will the State Auditor’s office be performing the FY10 financial statement and A-133 Federal grants audit?
3. How does this audit compare to the magnitude of management findings and recommendations found in other audits performed by your office?
4. Describe the terms “questioned costs”, “unallowable expenditures” and the very basics of acceptable grant management including the general life cycle of a grant.
5. In general, what percentage of Metro’s Federal grants are entitlement grants versus competitive grants and what is the difference between the two.
6. Crit Luallen stated in the Courier Journal that, “It is unacceptable for any government agency to have such a severe level of mismanagement and poor oversight. “… “It is clear by the types of serious issues and multiple concerns we found in the housing department that the city must take every step necessary to correct them. “ “This cannot be done overnight. The city has begun to address the issues, but the problems embedded in this department will take time to resolve by a full-time management team with strong financial expertise.” When your auditors finished your field work with Metro Government, do you think a “full-time management team with strong financial expertise” was in place? What did your recommendations reveal was needed in a management team – (ie. Numbers, background, expertise, etc.)
7. Since the financial management in this department was so inadequate, can a correlation or prediction be drawn for the financial management in the rest of this organization?
8. Although you described the financial management in the Housing and Family Services Department, what responsibilities were not being met by the Finance and Administration Department, Human Resources Department or the Mayor’s Office that should be addressed?
9. Describe what you believe to be the major issues with Metro’s financial management.
10. The audit stated HUD has been asked to review the $6.1 million in payroll which the State Auditor’s could not adequately test to determine if the city should reimburse any federal funding. One of the biggest concerns was the volume of expenditures repeatedly moved from one account to another “made it impossible for auditors to determine with assurance if payroll expenses were charged to the correct federal grants – ultimately causing the disclaimed opinion.” Has that subsequent testing been completed and if so, what was the result? Please explain why the use of “journal entries” were a problem in this department. Do you think excessive use of journal entries is the normal process within Metro Government?
11. Your testing was of FY08. When do you believe the vast majority of these problems began?
12. The audit stated the city is working to reconcile more than $1 million of differences in prior years between the city and federal financial management systems. Has that reconciliation been completed? What it being done with current employees or were experts brought in to help with the reconciliation? Why was HUD training not taken by Metro Staff?
13. A bank account unknown to the Finance Department was discovered by the Auditors. Was money being deposited into that account and disbursed from that account without any entry into the general ledger?
14. Do you believe Metro employees are aware of the ethics guidelines adopted by this government?
15. We have reviewed and summarized findings and recommendations from past years and while there were many in the Housing Department, nothing of this magnitude. Should the independent CPA firm who performed the June 30, 2007 audit have reported these issues or at least made some of the recommendations? (We were actually told in the audit review that things in the Housing Department were improving)
16. The audit stated the auditors found the housing department did not adequately correct earlier reported audit findings. What was the major cause that past findings were not corrected?
17. The recommendation of a tip line is something that has been discussed and recommended by our Internal Auditor in the August 2008 Ethic Program Internal Audit. How would you suggest we implement a tip line (ie. Third party administer, internal audit, 311 MetroCall, with police tip line, etc)
18. Do you have any concerns about Metro getting large funds from the Stimulus Package and do you have any recommendations on controls over these funds?