External Review Performed

July 6, 2012

CEDAR HILLS – After charges were filed in federal court against former Cedar Hills Mayor Eric Richardson, the City Council ordered an external review to be performed to determine if City funds were properly safeguarded against misappropriation during Mr. Richardson’s term as mayor. The City hired Squire & Company to review all transactions on the Mayor’s City-issued credit card, to verify the signatory authority of all depository accounts, to inspect a sample of disbursements from 2010 through the date of the final report, and to review the $371,726 transfer of recreation impact fees to the Golf Fund.

Squire & Company presented the results of their procedures during the June 19, 2012, City Council meeting. No concerns were expressed regarding the two transactions made on the former Mayor’s City-issued credit card. Squire & Company verified that Mr. Richardson had no signatory authority on any of the City’s bank accounts. During the disbursement sampling, Squire & Company randomly selected 450 transactions to test, and found only four irregularities, two of which were previously identified by City staff and corrected. Squire & Company praised the Finance team for their diligence in following documented policies and procedures established by the City, designed to detect and prevent improprieties. Regarding the transfer of impact fees, Squire & Company determined that correct accounting procedures were followed. The City has the appropriate documentation supporting the construction costs incurred for the Community Recreation Center through June 30, 2011.  The construction in progress costs were properly transferred to the Golf Fund and the transfer matched the amount of costs incurred by the City for the construction of the Community Recreation Center through June 30, 2011.
“While we did not suspect mishandling of public funds, the results of these additional procedures are reassuring,” said Finance Director, Rebecca Tehero. “The report confirms that the internal controls we have in place are working and that the annual, external audit is sufficient to identify any areas for improvement.”
The entire report provided by Squire & Company can be viewed on the City’s website at www.cedarhills.org.