By Stephanie Edwards
Members of the Lee’s Summit City Council heard the results from the recent city audit completed by outside auditors Rubin Brown, LLC. Christina Solomon, a partner with the firm, presented the findings of the audit to the council during the January 5, 2017 regular council meeting.
Among the findings of the audit, Solomon noted that “a conflict of interest policy exists and councilmembers and executive employees sign conflict of interest forms annually acknowledging compliance and understanding.”
Solomon noted two transactions that violated state statute. Both transactions have been the subject of criticism toward Councilmember Diane Forte and her dealings with the city. Forte’s business dealings violated a state statute that requires transactions with an elected official in the amount of $500 or more be advertised to the public and go through a bidding process.
But questions arose during the presentation of the audit findings. Councilmember Chris Moreno noted the lack of findings on the city’s dealings with former Councilmember Derek Holland. Holland served on the council from April 2012 to April 2016.
Holland owned Unemployment Insurance Services, Inc. and entered a contract with the city on January 3, 1978. Although the company was sold while he was in office, records obtained by the Tribune show payments to the company in 2012 and 2013. Payments were made in the amount of $435 on a quarterly basis. The total annual service charge was $1,740 in 2012 and 2013. The number of employees covered totaled 580.
Beginning in January 2014, the number of employees covered grew to 800.The quarterly charge was raised to $600 in 2014 for a total annual service charge of $2,400.
Holland resigned as registered agent for Unemployment Insurance Services on January 22, 2014.
Councilmember Moreno questioned Solomon on how quarterly transactions were viewed in the audit. He specifically mentioned contracts with an annual service charge and whether transactions that were paid out quarterly were considered one transaction or multiple transactions.
Solomon answered that they would have treated each as a separate disbursement each time it was made.
“When you reviewed the list were you provided any documents involving UIS?” Moreno asked. He then referred to a quarterly payment made in the first quarter of 2014 in the amount of $600 to the company, and questioned whether Solomon had noticed if it had been bid out.
“I’m happy to take this information and look at that data analysis,” Solomon said.
Moreno express concern that the total number of transactions in 2014 was reported on the audit as zero. “But on an invoice…Number 19039 from 1/1/2014 to 3/31/2014, the invoice date being 2/18/2014, the terms of a total annual service agreement of $2,400 and the check was made out for $600 to the company of an elected official at that time.”
Solomon explained that the audit ran queries on an elected official’s name and address. “So, if there is a business that did not have an elected official’s name or if it has a different address we might not have run those queries.” Solomon said that the audit employed utilized standard practices and procedures. She said the auditors would be happy to go back and do more work on the audit. Several council members stated that they would like more work done on the audit. Councilmember Moreno moved to extend the work. His motion was seconded, but Councilmember Trish Carlyle raised the question of spending more money on the audit.
The motion was ultimately withdrawn.