Park Board audit will be a forensic hunt

The audit digging into Cincinnati Parks spending would be a forensic hunt, dissecting financial relationships, activities and business procedures of all the organizations and funding streams related to the city park system.

Auditors would scour the books of city government, the Park Board, parks department and Cincinnati Parks Foundation.

That's according to the language of a contract Cincinnati City Manager Harry Black says he will sign "as soon as possible" with an outside auditor next week.

Mayor John Cranley asked for a complete financial review after Park Board spending on officials' perks was uncovered by The Enquirer, weeks before voters were asked to approve a parks levy. The ballot measure failed.

The audit will "identify potential financial and internal control risks," according to the contract, that may include "inappropriate expenditures of City or endowment funds, misappropriation of funds, and lack of transparency, and the ineffective design or implementation of internal controls, such as a lack of segregation of duties."

The work, by Indianapolis auditors at the firm of Crowe Horwath, would be completed by May 30, 2016.

Black waived an administrative code to put the contract out for bid.

"We knew we wanted to go with a non-Cincinnati based firm, not that Cincinnati firms are not good, but to maximize the total objectivity of the work that was going to be done," Black said. "I had my procurement office do a scan of all the firms that are out there."

He said Crowe Horwath is among the top 10-15 firms in the country for this kind of audit.

Members of the Cincinnati Board of Park Commissioners, however, are upset with the cost of the audit, which the Park Board would have to cover. The issue was raised Thursday at the board's monthly meeting.

"I just think it’s a huge waste of money," board member Susan Castellini said. She asked why an external audit is necessary when the Park Board is audited every year and always gets "a clean bill of health."

Is an external audit really necessary? Castellini asked.

Board President Otto M. Budig and Parks Director Willie Carden said the audit is the will of the Cranley administration.

"I'm not sure how hard we can push back, here," Budig said. "But I will certainly call the mayor to ask whether or will the contract be signed."

Budig also said he will reach out to the mayor about the city sharing some of the $45,000 cost.

The contract has already been signed by the auditing firm and parks leaders.

Black said he is "hopeful that the audit firm will be given full support and cooperation" by all entities, including the private Cincinnati Parks Foundation, which is an independent nonprofit and not part of city government.

Cranley wants the audit completed to show how the board spends public funds after Enquirer reports found Carden and parks Financial Manager Marijane Klug had received improper bonuses and continue to receive car allowances. Endowment funds also cover Carden's credit-card spending and Carden's expenses as a private club member, including meals.

“I am disturbed by some of these findings,” Cranley told The Enquirer after these details were reported. “We should put the same checks and balances and procedures in place for the private endowment money that we have for any city tax dollars.”

Cranley has promised transparency going forward.

An earlier audit several years ago stopped short of completion once a state ethics investigation was launched. That incomplete internal city audit raised questions about spending and subpar financial reporting and ultimately cast a shadow on the 2015 parks levy vote, which the mayor was championing and would have generated roughly an additional $7.8 million per year for the parks.

Red flags were also raised by citizens and The Enquirer when the Park Board donated $200,000 in endowment funds toward the levy campaign before rescinding that move after it was reported.

Ultimately, the levy was defeated by Cincinnati voters by a margin of 3 to 2.

Black said the audit will be a dynamic process. Auditors may find one thing that will send them looking in an unanticipated direction.

"That's the intent and the plan," Black said.

Parks officials said they'll see if city funds can assist in covering the audit's cost.

"Indeed if this is a city-oriented request," Budig said, "perhaps we can find a way to find some dollars from the city budget to at least partially offset that cost."

Black said his office did not initiate this audit.

"This is something the board is on record and park director is on record for saying they are prepared to pay for it," Black said.

The parks could tighten their seasonal staffing, Carden said. If officials cut six seasonal workers, that could make up the $45,000 cost, he said.

"Well, that is under the assumption that the city has said we aren't paying a dime for this," Budig said.

"They have said that," Carden said.

"A shame," Budig said.

Budig said he and Park Board member Dianne Rosenberg have a scheduled meeting with the city and will share the board's concerns.

Rosenberg wants to know "what role will the board play in helping our staff facilitate this audit so that we're kept apprised but we are also available, if and whether we need to be during this process?"

To this, Black said: "This audit engagement will be performed pursuant to best prevailing practices and periodic updates, and briefings will be provided" to the board.