By: Libi Uremovic| Original Article at Patch.com
REVIEW OF INTERNAL CONTROLS
A Public Records Request produced the Request For Proposal (RFP) that was allegedly sent out to Auditing Firms:
INTRODUCTION AND OVERVIEW
The City of Beaumont seeks proposals for a review and a report of the internal controls over the following processes:
Cash Receipts
Cash Disbursements
Financial Reporting
After a year of ignoring the public; Beaumont City Staff and Council agreed to form an ‘ad-hoc’ Internal Controls Review Committee. The Committee consisted of two members of the public that were hand-picked by Castaldo and Beaumont Finance Director Bill Aylward.
And here lies the basis of the problem: The fox is controlling the hen house.
City Staff has made the Internal Controls Review about processing and disbursing cash, but It is the Internal Controls of the Administration that need to be reviewed in Beaumont:
NO CITY CLERK
The City clerk is ‘the’ Internal Control to ensure that all documents are valid and all public records request are filled. This is a full-time $100,000/year job that requires a license and experience.
CITY STAFF OWNS THE PRIVATE COMPANIES HIRED BY CITY
It’s a big violation of internal controls that staff creates projects and awards contracts to their own companies.
NO-BID CONTRACTS VIOLATE STATE LAW
City Staff either awards contracts to their private companies or Urban Logic charges the City a 15% ‘fee’ and hires outside contractors themselves.
The City claims they received one bid for $57,000 to perform the audit they requested, but the audit City Staff requested is the basic review of process and procedure that is included in the yearly Financial Statements along with the GAAP Audit. In the past few years the City has paid $30,000 for the preparation of the Financial Statements.
Internal Controls are the checks and balances in place to prevent misuse of funds. Examples of lack of internal controls is a City Manager, Public Works Director, Economic Director, Planning Director, City Attorney, and Finance Director acquiring bonds because they profit directly from the sale of bonds.