The Mississippi State Board of Public Accountancy determined there was nothing improper about West Point-based accounting firm Watkins, Ward and Stafford’s handling of the city of Columbus’ 2019 audit report, after receiving a complaint about the audit from a Columbus resident.
Will Sanders, a co-founder of the group A Better Columbus, sent what he called a tip to MSBPA in March with concerns about the city’s 2019 audit. Specifically, he told The Dispatch, he was concerned both that the audit did not mention or go into detail about former Chief Financial Officer Milton Rawle’s embezzlement of nearly $290,000 between 2016 and 2018, as well as the fact that WWS certified public accountant Wanda Holley aided the city with bookkeeping and preparing financial statements while she prepared the audit.
MSBPA investigated the complaint and, in late April, found “the allegations in the complaint to be unsupported and therefore, meritless,” according to a letter the board’s associate director, Sharee Brewer, sent Watkins, Ward and Stafford and which the firm’s managing executive, Lee Stafford, shared with The Dispatch.
MSBPA is the regulatory board over certified public accountants and accounting firms in the state, and it has the authority to investigate complaints. If it finds firms to be out of compliance with accounting standards, it can issue penalties ranging from reprimands and warning letters to suspension of CPAs’ accounting licenses and fines, board executive director Andy Wright told The Dispatch.
Wright confirmed MSBPA received a complaint about the city audit from Sanders and that MSBPA investigated the complaint and found it meritless, but could not comment in more detail on the case.
Claims of ‘political motivation’
Holley prepared the city’s audit reports for both Fiscal Years 2018 and 2019 after Rawle resigned in February 2019. Rawle’s resignation followed a 16-workday suspension for failing to alert the city council of the city’s $800,000 deficit until November 2018.
Holley’s discovery of discrepancies in the 2018 audit led to the State Auditor’s Office investigating Rawle for the embezzlement.
During her preparation for the 2019 audit, Holley also worked with the city to correct some of its bookkeeping errors after Rawle’s departure, according to her report to the city council on Feb. 2.
Sanders told The Dispatch he reached out to MSBPA because he was concerned that in the audit report Holley prepared — as well as in her presentation on the report to the city council earlier this year — she did not go into specifics about Rawle’s embezzlement.
“In the financial statements themselves, there is not mention of the fraud,” Sanders said, “even though in my opinion, it would be material, both quantitatively and qualitatively. If there was a fraud, how do you know that all of it was identified and recorded correctly? … All these questions around the fraud were just not explained, and they were not explained in the presentation of the audit report to the city council.”
He also said the fact that Holley and Watkins, Ward and Stafford helped the city with bookkeeping and financial statements called into question the independence of the firm’s audit.
“It’s like grading your own papers when you do all the work of getting the financial statement made,” he said.
In an email to The Dispatch, Stafford said Holley and the firm did not do anything out of the ordinary when preparing the city’s audit report and that Sanders “is making these comments without complete knowledge of the engagements and apparently without current knowledge of governmental auditing standards.”
“Our auditing professionals receive extensive governmental training annually and have vast experience auditing governmental entities throughout the state,” he said.
Stafford also sent Sanders a letter suggesting the complaint was politically motivated. Sanders and ABC have been extremely vocal in their criticism of the city administration and have backed challengers to incumbent council members and Mayor Robert Smith in the upcoming June 8 election.
“We will give you the benefit of the doubt that you were concerned about the quality of our professional work and that your complaint was not an attempt to further your political agenda against City Officials, although we believe that was your larger reason for filing the complaint,” Stafford wrote in the response letter, which Sanders shared with The Dispatch. “Although we were advised that we could, we will resist the urge to file a complaint with The (accountancy) Board against you for filing a frivolous and politically motivated unmerited charge against our Firm.”
In an email to The Dispatch, Stafford doubled down on his criticism of Sanders.
“Since the audit procedures and the audit reports were proper and the Board found that Mr. Sanders(‘) charges were without merit, logic would say that the only motive, other than his lack of knowledge, would be political given the timing and his other activities,” he said.
Sanders disagreed, saying he simply wants Columbus residents to be aware of the embezzlement.
“My concern was that the people of Columbus know there was a fraud and know there was money taken from the people through the city government,” he said.
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Quality, in-depth journalism is essential to a healthy community. The Dispatch brings you the most complete reporting and insightful commentary in the Golden Triangle, but we need your help to continue our efforts. In the past week, our reporters have posted 46 articles to cdispatch.com. Please consider subscribing to our website for only $2.30 per week to help support local journalism and our community.
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