CPA consultant provides details on the uncovering of unreconciled city accounts
My name is Mike Crowder, CPA, and I would like to comment on the article printed in The Commercial Dispatch on February 3, regarding the City of Columbus.
I was hired by the City of Columbus in early January 2019, as a consultant to assist the city during the required suspension of the CFO, Mr. Rawle. According to my engagement letter, my responsibilities would consist of temporary comptrollership activities. My involvement lasted until April 24, 2019.
I would like to respond to some of the “alternative facts” that were presented in the newspaper article.
Regarding the bank reconciliations mentioned, the article stated: “‘The auditors paused the audit so that the city could reconcile its bank account, but the accountant hired by the city to do so left before finishing the job, so the auditors had to do so while restarting the audit,’ Holley said.”
I was never assigned to re-reconcile the prior fraudulent bank reconciliations; in fact, I was the one who discovered that the banks were not reconciled and reported this to everyone involved-the Mayor, COO, city attorney, auditors, finance committee and later to the council. After this discovery, I was able to obtain a beginning point on the bank reconciliations so the city could move forward, while disclosing to everyone that the prior fraudulent reconciliations (that apparently went back several months and years) would be left to the permanent CFO to correct. My job during this short engagement was to keep the city’s finances moving along on a daily basis and to correct errors/omissions as I found them.
The facts and timeline that occurred regarding the bank reconciliation fiasco were as follows:
I discovered during the very first month of my engagement (January 2019) that there were problems with the bank reconciliations, including fraudulent entries that were being made, in order to give the appearance of being reconciled. After discovering this problem, I notified both Mayor Robert Smith and COO David Armstrong, and we subsequently had meetings on January 31, 2019 and again on February 14, 2019 to discuss. At the February meeting, I requested we call the auditors to alert them regarding the bank reconciliation problems, as the city had a responsibility to do so. It was my understanding at the time that the auditors were almost finished with the audit for FY 2018, so they needed to be notified as soon as possible. A second meeting was scheduled on February 19, 2019 for that purpose. Mr. Rawle was aware of the problems that I had discovered with the bank reconciliations and between the two meetings, he resigned. I vividly recall that, during this meeting, the auditor (Wanda Holley) indicated Mr. Rawle telephoned her the night before the February 19 meeting and disclosed to her that he had not properly reconciled the bank accounts.
The meeting was held on February 19, 2019 with Mayor Smith, COO David Armstrong, the city attorney, the auditor Wanda Holley, and me present.
Because of my discovery of the fraudulent bank reconciliations and the trail that I left regarding this problem the embezzlement was later revealed. The key to the discovery of the embezzlement was fraudulent bank reconciliation. I believe that, had Mr. Rawle not been suspended in early 2019, necessitating another accountant to assist during his suspension period, the embezzlement and fraudulent bank reconciliation activity might still be occurring.
I wanted to emphasize that I was not hired to re-reconcile the prior fraudulent bank reconciliations, so I did not “leave before finishing the job.” Rather, I was the one who discovered the fraudulent reconciliations that led to the embezzlement case.