Putting our house in order

A new era begins


The Goochland County Board of Supervisors voted unanimously to conduct a forensic audit of the utilities department concurrent with a financial statement audit of all county departments, including the school system. They appropriated up to $50,000 to fund the audits, which will be performed by accounting firms other than those, which have audited county departments in the past.
The special called January 28 meeting, initially announced as a closed session, was held in public following objections from a local attorney. Its sole purpose was discussion of the upcoming audits with Goochland Commonwealth’s Attorney Claiborne H. Stokes, Jr.
Hours before the meeting, county administrator Greg Wolfrey announced his resignation and departed from county offices.
Jubilation generated by news of Wolfrey’s resignation bubbled through the standing room only crowd that filled the board meeting room and spilled out into the hall.
Reporters and TV crews tripped over each other to gather citizen comment and record the proceedings.
On December 23, the supervisors voted to send the matter of undeposited checks found in the utility department to Stokes. After meeting in closed session with Stokes on January 13 the board agreed in theory that a forensic audit of the utilities department and a complete audit of the entire county was in order.
Stokes told the supervisors that he contacted the forensic accounting firm he used whiile prosecuting a local embezzlement case. Those auditors, said Stokes, advised a forensic audit for the utilities department, but not for the entire county.
A forensic audit, explained Stokes, focuses on a specific target agreed upon by the forensic auditors and the concerned party, in this case, Goochland County. This type of audit is used in matters involving potential or actual criminal or civil litigation.
The analysis is typically conducted in phases and may evolve as work progresses. As each phase is complete, the results are analyzed and discussed with the client to determine if the scope is to be expanded.
Processes examined may include, but are not limited to: the evaluation of internal controls; investigation of fraud; tracing of funds; recovery of misappropriated funds and determination of damages.
Fraud, said Stokes, by its very nature involves deception. It is impossible to guarantee with complete certainly that all fraud will be discovered.
Given the circumstances, a forensic audit is an appropriate procedure to address the concerns in the utilities department, said Stokes. The board concurred.
Using the same procedure to audit all other county departments would be extremely expensive and difficult, because it would not have a focal point, Stokes explained.
He instead suggested a financial statement audit, which is an expression of an opinion whether the entire county’s financial statements accurately describe the county’s financial condition.
This type of audit, which follows guidelines such as Generally Accepted Government Auditing Standards, would be appropriate for the entire county. If any problems come to light during the financial statement audit, they can be referred to the forensic auditors for further examination.
Stokes was careful to state that he can be involved only in the forensic audit because of the potential for criminal activity. He stated that he cannot yet determine if there has or has not been any criminal activity in the utility department.
“I believe that the citizens of Goochland County want a plan so the people see that we are going to get to the bottom of this,” said Stokes.
The good name of the employees of Goochland County also needs to be protected, he said.
Stokes said that a “guesstimate” of the cost of just the forensic audit is up to $30,000. With tax season fast approaching, the financial statement audit might not begin until after April 15.
Board chairman Andrew Pryor, District 1 said that his only contact with the auditors will be to sign contracts and authorize payments.
James Eads, District 5 contended that it is important to reinforce public trust in county finances and employees. He commended Stokes on his recommended plan of action.
“I personally do not believe that there have been any unlawful acts, but we’ll find out. What was done was inexcusable, but it was not criminal, in my opinion,” said Eads.
Supervisors will be free to consult with the forensic accountants, but Stokes must be present at any such meeting.
If the forensic audit reveals no criminal action, Stokes promised to make the results public and explain the details to the supervisors in open session. Should criminal action be discovered Stokes, will prosecute the alleged offenders.
News of these audits is balm to the sores of rumor that have plagued citizen confidence in county government in recent months.
The supervisors are wise to appropriate reasonable funding at the outset to move the process forward as quickly as possible. However, thoroughness must trump speed to erase all doubts.
A beneficial side effect of the process will be a strong and healthy fiscal foundation for Goochland’s future.