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DS-17-048 - Killeen Visioning Session

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Discussion on the timeline and process for a forensic audit

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DS-17-048 - Killeen Visioning Session

  1. 1. City of Killeen, TX City of Killeen – Forensic Audit March 21, 2017 4828 Loop Central | Suite 1000 | Houston, Texas 77081 PH: 713.968.1600 | FAX: 713.968.1601 | www.mcconnelljones.com
  2. 2. City of Killeen, TX Agenda A. Introductions B. Engagement Milestones C. Today’s Process D. Areas for Risk-Based Analysis E. Q&A PAGE  1
  3. 3. City of Killeen, TX Engagement Milestones July 31, 2017 Draft Report On-Site Interviews, Walk-Throughs, Survey and Testing April 10, 2017 Kick-Off Meeting Presentation April 10 – 28, 2017 April 10 – June 30, 2017 July 7, 2017 July 24, 2017 July 17, 2017 Audit Advisory Committee Briefing (May 16, 2017) Management Comments Analysis & Benchmarking Final Report PAGE  2
  4. 4. City of Killeen, TX Discuss • RED FLAGS – Concern and details of past events. • RISKS – What you consider today’s risks for the activities under audit. • FUTURE – Your vision for the future. Today’s Process A look at the past with an eye towards the future. PAGE  3
  5. 5. City of Killeen, TX • Determine if fraud and/or gross mismanagement exists • What were the reasons for this dramatic increase in spending? • How were these capital projects financed (e.g., bond issuance, federal/state grants, general fund revenues/reserves)? • Were there significant cost overruns (change orders due to renovations, etc.)? Objectives Capital Outlays Conduct an analysis of the City's significant capital projects during the period Scope Period • FY2002 through FY2016 PAGE  4
  6. 6. City of Killeen, TX Capital Outlays Your thoughts… Risks FutureRed Flags PAGE  5
  7. 7. City of Killeen, TX To determine: • Were bond funds spent legally and for the purpose for which the bonds were approved [e.g., were idle funds used for other purposes]? • Were funds remaining after project completion, if any, used appropriately and legally? Objectives Use of Bond Money Review the City's Major Bond Issuances Scope Period • FY2002 through FY2017 PAGE  6
  8. 8. City of Killeen, TX Use of Bond Money Your thoughts… Risks FutureRed Flags PAGE  7
  9. 9. City of Killeen, TX To determine: • Were transfers from restricted funds allowable and legal? • Were the transfers authorized? Are the City's policies governing inter-fund transfers adequate to prevent misuse or misallocation of restricted funds? Objectives Inter-Fund Transfers Review the Significant Transfer of Funds Between the Enterprise and Special Revenue Funds Scope Period • FY2010 through FY2017 PAGE  8
  10. 10. City of Killeen, TX Inter-Fund Transfers Your thoughts… Risks FutureRed Flags PAGE  9
  11. 11. City of Killeen, TX • 3 percent City-wide cost of living adjustment (COLA) implemented in June 2014 • 8 percent salary increase for civil service positions implemented in October 2014 Objectives Pay Increases Review City’s Fiscal Planning for the Short-Term Funding and Long-Term Impact Scope Period • FY2014 through FY2017 PAGE  10
  12. 12. City of Killeen, TX Pay Increases Your thoughts… Risks FutureRed Flags PAGE  11
  13. 13. City of Killeen, TX To determine: • The City's participation is in keeping with best practices. (Sampling) Objectives City/Owner Agreements Review City’s Fiscal Planning for the Short-Term Funding and Long-Term Impact Scope Period • FY2002 through FY2016 PAGE  12
  14. 14. City of Killeen, TX City/Owner Agreements Your thoughts… Risks FutureRed Flags PAGE  13
  15. 15. City of Killeen, TX • Compare the City's private roadway ownership and City participation to best practices to assess the overall efficiency of the City's arrangements. Objectives Private Roadway Ownership Review City Participation, if any, in Private Roadway Maintenance / Improvement Scope Period • FY2002 through FY2016 PAGE  14
  16. 16. City of Killeen, TX Your thoughts… Risks FutureRed Flags Private and Public Roadway Ownership PAGE  15
  17. 17. City of Killeen, TX To determine: • Did Council ratify expenditures as required? • Is there any evidence of fraud or abuse of funds during the period? Objectives Post-Recall Spending Review Significant Expenditures During the Six-Month Period Without a Fully-Seated Council Scope Period • November 2011 – May 2012 PAGE  16
  18. 18. City of Killeen, TX Your thoughts… Risks FutureRed Flags Post-Recall Spending PAGE  17
  19. 19. City of Killeen, TX Questions PAGE  18

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