By John Schaffner
The administration of Mayor Shirley Franklin, which was marred in the final four years with budget problems and audits that questioned the handling of taxpayer money, ended on a questionable financial note.
An internal audit released Jan. 6 showed that top Franklin aides spent $4.686 million on construction-change orders for new public safety facilities without proper documentation or required approvals.
Change orders are requests to spend more money to complete particular projects than was budgeted and should have been approved by the city’s chief procurement office or City Council.
According to city auditor Leslie Ward those things never happened.
The audit also found that city officials processed two bank loans totaling $24 million without going through the city’s approved financial controls.
The audit report states that “failure to follow procurement rules is a red flag for potential fraud, increasing the risk that the city will either pay too much for services received or not receive the quality or quantity of services it paid for.”
The audit found no evidence of fraud or waste, but noted there were no assurances fraud did not occur.
The audit was conducted at the request of then-Chief Financial Officer Jim Glass, who was concerned about the city funding for the construction of the public safety facilities.
According to published reports, David Edwards, a senior policy adviser to Franklin said in a letter to the Ward’s office that mistakes “are always made in the management and execution of complex problems.” He argued that quality work was “completed on time and on budget.”
Ward, however, reportedly responded in a letter to city officials that it is “implausible to say that the public safety facilities were delivered on time and on budget.”
The audit said the work was supposed to be finished by October 2008. It had been reported that police officials said they would begin moving into the new facilities that September.
Edwards apparently disputed the audit’s finding that the change orders were improperly managed because they did not result in increased cost to complete construction of the new facilities. He claims the money was budgeted elsewhere or paid through contingency funds.
As for the two bank loans totaling $24 million, Edwards agreed the process for managing the funds was flawed. But he claims there is no evidence showing city did not receive what it requested.
City Council members Natalyn Mosby Archibong and C.T. Martin have requested a more detailed forensic audit of the construction of the public safety facilities and the sale of City Hall East, where the police and fire rescue agencies worked until they moved to the new headquarters in June 2009.
Ward said her staff does not have the resources to conduct a forensic audit, which would entail auditing the detailed spending on each construction contract.
Meanwhile, Edwards remains working for the city in a temporary capacity.