County seeks forensic audit price-check

Dave Rogers

For The Record

Orange County Commissioners agreed Tuesday to the idea of a forensic audit to follow the county’s money – if it doesn’t cost too much.

With Commissioner Jody Crump absent, Commissioners Johnny Trahan, Barry Burton and John Gothia joined County Judge Dean Crooks in voting 4-0 to have Purchasing Agent Connie Cassidy advertise for proposals.

“Given some discrepancies in some of the things we’ve had over the past year or so, given the fact that we have a fairly new auditor, a new legal advisor, a new judge, a whole bunch of new people, the consensus was we probably need to go forward with a forensic audit,” Crooks said, reporting on the findings of the county’s Outside Auditor Committee.

The committee, which includes Crooks, Gothia, Assistant County Attorney Denise Gremillion, County Auditor Pennee Schmitt, County Treasurer Christy Khoury, District Judge Courtney Arkeen and Sheriff Keith Merritt, was formed to review proposals for a new outside auditing firm for required annual checkups.

Cassidy asked for the committee on Oct. 10, saying the county had used the same firm, Patillo, Brown and Hill of Waco, for more than 20 years when the state recommended changing firms every three to five years.

Crooks explained the difference between an outside audit and a forensic audit was that an outside audit addressed accounting principles without looking at details while a forensic audit follows the money to make sure that all accounts are square.

The discrepancies he was talking about, Crooks said later, included the $12 million former county judge Stephen Brint Carlton said was discovered by auditor Schmitt right before Tropical Storm Harvey hit town in August, 2017.

Also, Crooks said he wanted to know what happened to the $13 million “Rainy Day fund” that was funneled into the 2018 budget at the last minute to cover Harvey recovery expenses and why, after FEMA reimbursed the county $10 million three months ago, the county had to get an $8 million line of credit to avoid cash-flow problems at the end of this year.

“If the math was halfway right, we wouldn’t be in the situation we are now,” Crooks said.

The judge also is of the opinion that restricted funds have been illegally comingled with non-restricted funds.

The three commissioners all agreed a forensic audit would be nice, but not at any price.

“It depends on what the prices are,” Trahan said. “This is good to go out for proposals but I’m not endorsing it until I know what the money says.”

Burton and Gothia echoed that opinion, Gothia sharing Crooks’ view that it would be nice to start over with a clear financial picture – if the price was right.

Burton, who was defeated for re-election along with Carlton and Crump in March, clearly took issue with Crooks’ reference to discrepancies.

“We have not had any red flags,” Burton said. “I understand we have new people but our audits have been clean to date.

“I’ve heard these things can be really expensive. I don’t know any reason to throw good money at something when I don’t know that we have a problem.”

The need for forensic audits have been debated by other Southeast Texas governments, and, in fact, former commissioner John Banken sought one for years.

But, ultimately, the cost is a deal-killer.

Crooks seems intent on at least a forensic “light” audit.

“We’re probably going to aim high and then, if the proposals are too expensive, we may have to tone it down a bit to get it to be something a little more favorable.

“But there are certain specific funds that we’re going to want to go back a few years and take a look at.”

In other business Tuesday, commissioners received a tax office collection report from October showing $337,548 as the county’s share; and the county paid $223,613 in weekly bills.

Commissioners also voted 4-0 to renew its health and prescription insurance for over-65 retirees, noting the monthly cost to the county for the combined policies is $502, down $25 from last year.

A week ago, on Nov. 14, commissioners held their new monthly meeting on Wednesday. It lasted 25 minutes.

The county accepted a direct deposit from the state for $376,897 in September sales tax and issued checks for $184,943 in weekly bills.