The federal investigation into former County Manager Wanda Greene threw a wrench into what is typically a pretty undramatic affair: the county audit.
“Under normal circumstances, I would highlight our unmodified opinion and speak about how our financial position is sound and stable, which it is,” Finance Director Tim Flora told the Buncombe County Board of Commissioners during a presentation of the fiscal year 2017 audit on Jan. 16. “However, as is well-known, there is currently an investigation of our former county manager, and the nature of this investigation is related to potential fraud.”
Tightening internal controls against impropriety became an overarching theme at the meeting. During the audit presentation, Flora outlined a broad timeline detailing how the county first became aware of financial irregularities tied to the former county manager, and commissioners took time to highlight controls they have developed to ensure something like this doesn’t happen again.
What the county knew and when
The early signs began in fall 2016.
“There were some peculiar decisions and directions provided by the former county manager that came across as odd,” Flora said. “Nothing concrete, mind you — just things that made me scratch my head and wonder, ‘What’s going on?’”
In spring 2017, Flora said, Greene took some questionable actions that raised red flags among staff in the county Finance Department. “Not much detail can be provided at this time, but these actions led to an increased level of scrutiny regarding specific financial events,” he said. “It is likely you the board and the public are unaware of these actions, because ultimately they were prevented from occurring because of our internal controls.”
On May 30, Greene announced her retirement after 23 years of employment with the county, effective July 1.
Flora said that over a four-day period in June, the Finance Department noticed several irregularities tied to Greene. Internal controls caught these events, too, but not until after they had already occurred. Staff determined that some of these irregularities were inappropriate. The county started an internal review, and the internal auditor and the human resources director were notified. County staff documented these irregularities the weekend after the discovery and delivered them to the county’s senior attorney on the following Monday.
“Based on this, it was determined that a potential breach had occurred,” Flora said. “While the senior attorney immediately notified the proper legal authorities, finance, HR and IT began the process of restricting county manager access to our systems as well the administration building.”
Flora said county staff notified Greene of the restrictions placed on her access and the county began preserving evidence. In July, as Mandy Stone was assuming the role of county manager following Greene’s retirement, the Finance Department broadened its internal review to determine the financial impact of the events and worked with authorities as they began their investigation, according to Flora.
In the same month, Flora said the county notified its external auditor, the Gould Killian CPA Group, which had already started working on the audit, of the findings uncovered by the internal review and the existence of an investigation. The county then notified its state oversight agency, the Local Government Commission, as well as the state treasurer and state auditor.
In August, the U.S. Attorney’s Office confirmed that there was a federal investigation involving Greene and others.
Auditing the audit
Within the framework of the criteria the financial auditors evaluated, the results of the county’s FY 2017 audit are good. The Gould Killian CPA Group delivered a clean (or unmodified) opinion to the county, meaning that the auditor sampled, assessed and tested county financial records and found nothing that would result in a misstatement of the county’s financial situation.
However, in anticipation of questions from the public about how the county could receive a clean audit amid an ongoing federal investigation, Flora and Ed Towson, a principal at the Gould Killian CPA Group, took time during the meeting to explain the reasoning behind this decision.
“The scope of the audit — what we hired our external auditors to do — was to audit the accuracy of our financial statements,” Flora said. “These are accurate and have always been accurate to the best of our knowledge. The auditor does not make a determination of whether fraud has occurred — rather, whether there have been unreasonable misstatements in the financial statements. There are none. That’s all a clean audit means.”
Flora also clarified that a clean audit does not mean that there has been a total absence of wrongdoing. He divided Greene’s questionable actions into two categories: actions that were inappropriate and actions that were technically in her authority but were questionable because of other factors.
“The dollar value of the first category, those that are inappropriate, as far as I currently am aware, are not large enough to affect county operations, and we remain in a stable financial position despite these events,” Flora said. “All other questioned events as discovered through our internal reviews happened through budgeted expenditures and also do not affect our financial position in any new ways.”
Flora also clarified that the county is not missing any money. “Every dollar in our financial system is accounted for in these statements we present to you tonight,” he said.
Towson said Buncombe County does have a functioning system of internal control, with the detection part of the system being instrumental in flagging some of the irregularities tied to Greene. “The system itself is designed in a way that is reliable, and therefore it is not deficient,” he said “Can it be improved? Any system can be improved, but it was reliable and … it did detect the problem.”
One recommendation the firm has for strengthening the county’s system of internal control involves adjusting “the tone at the top” — making sure every employee realizes they have a duty and responsibility to report anything they think is inappropriate.
“There was an old saying, I think in World War II: ‘See something, say something,’” Towson said. “That should be the encouragement for the educational processes, the systems to allow people to report to supervisors or on the whistleblower line or any other mechanism. We agree that that is important to strengthening the system.”
Restoring faith
Before the audit presentation, commissioners presented a list of internal reforms the board has undertaken that build on reforms implemented since last July 1:
1) “If it is determined that public funds have been used for illegal or unethical purposes, the Board of Commissioners instruct the county manager to continue efforts to recover funds, as legally permissible.”
2) “The Board of Commissioners shall provide a performance review of all appointed staff (county manager, chief financial officer, county clerk, Board of Commissioners attorney) in July of each year. Due to the special circumstances of FY 2018, the BOC will also conduct a mid-year goal-setting session and review with appointed staff, to take place no later than February 2018.”
3) “The budget director will provide budget to actual reports, and the chief financial officer will provide financial updates on a monthly basis.”
4) “On a quarterly basis, the internal auditor will report to the Board of Commissioners on the current priorities of the internal audit committee.”
Commissioner Mike Fryar said Stone and county staff have already started following through with several of these directives, specifically Nos. 1, 3 and 4, and suggested that the items were merely formalizing steps that Stone had already taken. “I didn’t know it was going to be put in the paper and brought forward, so I think it needs to be relooked at, because three of the things here are already part of what she [Mandy Stone] has put in place herself without instructions from us,” he said.
Commissioner Jasmine Beach-Ferrara told Xpress via email that these reforms do build on work that’s been performed under Stone’s leadership, which is exactly the point. “In regards to #1, #3, and #4, the instructions provide new specific guidelines that, in my view, it’s critical to be clear and precise about so we are communicating clearly with staff and so that community members are as informed as possible,” she stated.
Commissioners also discussed other changes the county could implement in the near future. Commissioner Joe Belcher said one item the board should consider is a one-cent reduction in the property tax rate in the 2018 budget to return money to the taxpayers, a move that Commissioner Robert Pressley said he supported.
Belcher also noted that the county could benefit from adding a watchdog function to the county system. “If something does not fall exactly within policy in a gatekeeper or watchdog function, it immediately kicks it out. … It’s a part of the private sector, and it is a good policy for us to explore,” he said.
Belcher said he was glad the commissioners were taking the opportunity to have this conversation in front of the public — something Commissioner Ellen Frost also appreciated. “Too often in the past, commissioners have been the last to know things, and it’s hard to lead when you’re in a position of not knowing things, so going forward I look forward to greater transparency not just with the public but on us too,” she said.
Frost said she remembers being told during her training not to micromanage the county manager. “Well, that has burned all of us, so I think we’re all ready to move on from that strategy,” she said.
Wow, government fraud and intrigue in little, ole Ashetown, NC.
But, there have been so many regular commenters on this site who have repeatedly declared government to be only benevolent ……and void of graft, fraud, waste and mismanagement. What? What do we have here?
Beat that strawman! Whack it good! Maybe if you hit it hard enough it’ll bleed!
What we have is a manager system where the power of unelected officials grows ever greater as elected officials reach the end of their terms and new ones defer to them as a source of institutional knowledge and continuity. That can happen in public institutions, quasi-public ones (look at Skyland and Riceville fire departments) and private ones. The English socialist Tony Benn had five questions that citizens should ask of people in government:
“What power have you got?”
“Where did you get it from?”
“In whose interests do you use it?”
“To whom are you accountable?”
“How do we get rid of you?”
It’s time to start asking those questions more regularly, whether it’s to elected officials, appointed members of boards, or unelected senior staff.
Oh that Govt strawman is going to bleed, alright. Bright red.
It is lining up to be an explosive year on the Fed level.
Exposure of breathtaking corruption of Wash DC coming soon to a TV near you.
Buckle up and get some popcorn!
It’s going to be hard. Lots of cronies are used to not being questioned or held up to any standards.
On a local level, the excuse of the management style system is just that LOL. Checks and balances failed here simply because Green was allowed to become too powerful. And all the while a voting population who was more concerned with which worthless LIEberal they could push into the spotlight based not on any qualifications that mattered. Except for how much money they could collect and spend. And in that regard, Green was their ally. After all, all she had to do is come before the commission and claim more money was needed. And we all know how the leftist LIEberals like to spend money. Even if it’s wasted away. Another person commenting here was in favor of the re-evaluations and property tax increases. And didn’t question them at all, But now is making excuses. Same goes for Bothwell when the recession hit and property values declined but the taxes didn’t. Which was a in ALL REALITY is a property tax increase even though he claimed taxes hadn’t risen here in “years” lulz.
The LIEberals in government didn’t question or care about the financial numbers Green presented them because she was part of the system that wanted more and more money. Don’t forget that. Any excuses made now are just a way to say that it WASN’T their fault they she went out of control. Uh yeah LIEberals, it actually is your fault. You all turned a blind eye to it because she was like a drug dealer to you. Except it was money and how much she could spend on your worthless projects that was the addiction.
“Another person commenting here was in favor of the re-evaluations and property tax increases. And didn’t question them at all, But now is making excuses.”
Here’s a tip: don’t put words in other peoples mouths. The re-evaluation was appropriate because people in $80,000 homes in the county were subsidizing rich property owners in booming parts of Asheville. Some people here have seen their property skyrocket in value over the past decade and wanted to freeload on the old assessment, while complaining that other “elite” beneficiaries of the property boom aren’t paying their fair share. Can’t have it both ways.
There are libertarians who fundamentally oppose property taxes and regulations and government services and will happily burn their own trash and homeschool their kids and put gravel on their roads. I don’t agree with that mindset, but they are at least consistent. That’s very different than people who object to property taxes but expect government to repave the roads outside their house.
So you can pretend all you want that liberals were okay with money being showered on staff salaries or that damn horse show instead of on schools and public safety, or that they’re okay with the lack of transparency that’s finally being investigated in county fire departments, but you’re only lying to yourself.
LOL but the money ain’t going to the roads. Or the pipes or anything else. It’s being funneled to special interests, SJW pet projects and their associated crony directors with great paychecks and of course to government employees. Where the one’s on the bottom who WERE SUPPOSED to see a raise never got one. And the one’s at the top not only gave themselves bonuses, but were allowed to bring in close family and give them PHONY MADE UP JOBS. And the LIEberals said nothing, did nothing, and questioned nothing lulz. Better support more crony fees too LIEberals. After all, they’re needed not for essential functions but essential payoffs and causes.
LOL and I almost forgot to say that no matter that the LIEberals are in power now locally that their arrogance will be their own undoing. They can tell everyone how they care about the poor, the blacks, the women, the gays, and the environment but it’s not true. What they really care about is power, money, and control and how to manipulate the previously mentioned groups to continue to vote for them. But as we’re seeing nationally now since the LIEberals have lost the working and middle classes, they want to REPLACE them with ILLEGALS. And so it will be their current supporters as soon as their usefulness to LIEberals is deemed no longer needed. LIEberals are showing us all their true colors. They will literally steal your money and kick you out of your house so their corrupt government machine can continue to run. They don’t care that the machine is broke though.
“They will literally steal your money and kick you out of your house”
[citation needed]
You can lie to yourself all day long if it makes you feel better, but you don’t get to pretend that the world looks like that. The city and county budgets are public records. Come back with actual ideas on policy and spending priorities based on actual numbers.