The Forensic Audit Issue

The Gist

Mayor Akins indicated on social media that she planned to request a forensic audit at the City of Ashland once she “had the votes.”

A forensic audit is called when one suspects criminal activity by the people managing their funds – in our case, the City’s Finance Department staff.

Mayor Akins had not brought any evidence to Council for us to assess whether a forensic audit was an appropriate step.

Safeguarding the public purse from fraud is one of the greatest obligations of the City Council, so if there is evidence of criminal activity, it is imperative that it be brought forward to the Council immediately so that it can be acted upon.

I asked for, and Council approved, adding an item to the Council agenda at our last meeting to inquire as to whether Mayor Akins had evidence for us to consider.

She declined to bring forward any evidence and said she would bring the issue forward if and when she chose to. The video of the Council meeting interaction is here. This agenda item starts at 2:58:11.

After the meeting, Mayor Akins published a blog on the Chronicle website saying “In accounting, the typical use of the term applies to “looking for any unusual developments in the accounting and financial systems” of an organization.” That’s not true and a simple Google search for “forensic audit” shows otherwise.

Mayor Akins also indicates in her blog post that former Interim Finance Director, Alison Chan, “suggested a thorough look at the city’s finances before she left. She said that the city’s finances were not “clean” due to a variety of financial practices over the years.”

Again, not true. Ms. Kahn addresses this specifically the last time she came before Council, which was the day before she retired and left her post. That video is here. Allison Chan’s statement begins at 3:45:03.

Given that no evidence has been forthcoming, it seems likely that this statement on social media was simply to support the narrative that the City is in poor hands coming up to the November elections.

The Details

Some residents have heard rumblings about what happened at the last council meeting where I requested that an item be placed on the agenda to talk about a potential forensic audit at the City after Mayor Akins posted on social media the following statement:

“Dean Silver I will be proposing, as you know, a forensic audit as soon as I have enough votes on council”

A forensic audit is called when one suspects criminal activity by the people managing their funds – in our case, the City’s Finance Department staff. The Corporate Finance Institute defines a forensic audit as “an examination of a company’s financial records to derive evidence which can be used in a court of law or legal proceeding.” It is called when one suspects corruption, asset misappropriation, or financial statement fraud.  More info is here.

Safeguarding the public purse from fraud and corruption is one of the greatest responsibilities of the City Council, so if there is suspicion of criminal activity, it is imperative that whatever evidence is available be brought to the Council immediately so that it can be acted upon.

Mayor Akins had not brought any evidence to Council for us to assess whether a forensic audit was an appropriate step. So, I asked for, and Council approved, adding an item to the Council agenda at our last meeting to inquire as to whether Mayor Akins had evidence for us to consider.

She declined to bring forward any evidence and said she would bring the issue forward if and when she chose to. The video of the Council meeting interaction is here. This agenda item starts at 2:58:11.

After the meeting, Mayor Akins published a blog on the Chronicle website saying, “In accounting, the typical use of the term applies to “looking for any unusual developments in the accounting and financial systems” of an organization.” That’s not true and a simple Google search for “forensic audit” shows otherwise.

Mayor Akins also indicates in her blog post that former Interim Finance Director, Alison Chan “suggested a thorough look at the city’s finances before she left. She said that the city’s finances were not “clean” due to a variety of financial practices over the years.” The second part is almost true in that Ms. Chan says that the specific process she had proposed and the Council accepted is “cleaner,” but Ms. Chan does not call for a thorough look at the City’s finances. And she makes it very clear that she has no concerns that anything nefarious is going on at the City of Ashland’s Finance Department.

The conversation being referenced here happened at the last meeting Ms. Chan attended with Council the day before she retired and left her post. That video is here. Ms. Chan’s statement begins at 3:45:03.

Given that no evidence has been forthcoming, it seems likely that this statement on social media was simply to support the narrative that the City is in poor hands coming up to the November elections. Unfortunately, it is yet another direct, and unfounded, attack on our staff. Honest people have a hard time when it is insinuated that they might be corrupt or committing fraud. It is this type of social media behavior that has contributed to the decisions by many in our Administrative Department to resign and move on to positions where they are treated with respect.

The fact is, if we did have a problem like this, the very worst thing would be to publicly announce any indication that an investigation would be forthcoming. If one suspects fraud, it is best to quietly put the investigation in place so that the person cannot cover their tracks. But again, there seems to be no legitimate reason to call for a forensic audit.

I indicated at the meeting that if Mayor Akins did not have any evidence to bring before Council she should apologize to our staff. I stand behind that statement. Our finance staff have managed our City very well through incredibly challenging times these last few years. They deserve to be treated with respect, not maligned publicly with no evidence.

If you have any thoughts, comments, or questions, feel free to email me at tonya@council.ashland.or.us