State audit will take place of internal audits, Isherwood tells Crestwood officials

By Mike Anthony

Crestwood officials should restrain themselves from spending “any more of the people’s scarce resources on internal audits,” according to Kelley Isherwood of Oakville, chairman of the Crestwood Smart Growth Alliance.

In a prepared statement he read last week to Mayor Jim Robertson and the Board of Aldermen, Isherwood said, “… We suggest that the city restrain itself from spending any more of the people’s scarce resources on internal audits. The state’s audit will take its place.”

Isherwood told city officials Oct. 28 that “members of friends” of his organization have gathered “the lion’s share of 1,100-plus signatures requesting a truly independent state audit. This total far exceeds the number required …”

Under state law, 750 signatures are needed for a state audit. The cost of a state audit of the city’s finances would be borne by the city of Crestwood.

Noting that his organization “was formed to monitor the aggressive economic development policies of the city administration,” Isherwood said, “We discovered that there were five redevelopment areas which affected approximately 80 businesses along the Watson Road corridor. Every one of those businesses is subject to the use or abuse of the economic development tool, eminent domain. Initially our membership consisted of owners of some of those businesses or employees whose jobs were threatened by redevelopment. Eventually our membership expanded tenfold to include hundreds of Crestwood residents who were opposed to the questionable development at Watson and Grant (roads).

“You have questioned the existence of our organization and choose to ignore its political significance,” Isherwood said. “I can assure you that I represent a considerable force in your community consisting of Crestwood residents and business owners.

“As a result of numerous requests for public information under the state’s Sunshine Law, we became aware of personnel turnover at the highest levels of the city administration. Individuals left under clouds of mystery surrounding the reason for their departure,” he continued.

Noting that “there seem to be questions of improper handling of the finances of the city,” Isherwood said, “… Just this month, the city reported that they will have to restate fiscal years 2001 and 2002. In addition, the city seems to have a problem closing the books on fiscal year 2003. Reports of ‘anomalies’ raise a red flag of concern about the financial condition of the city.”

Over the past several months, forensic auditors from Brown Smith Wallace, the firm recently selected by the Board of Aldermen to perform the city’s fiscal 2003 audit, performed an intensive investigation of the city’s fiscal 2001 and fiscal 2002 records.

A report dated last Friday alleges that two former Crestwood officials — former City Administrator Kent Leichliter and former Finance Officer Robert Wuebbels — violated the City Charter, numerous ordinances and their duties as fiduciary officers in their handling of the city’s finances during fiscal 2001 and fiscal 2002.

Current City Administrator Don Greer told the Call that changes have been implemented or are scheduled to be implemented to prevent many of the issues identified in the Brown Smith Wallace’s forensic audit.

Mayor Jim Robertson told the Call that he believes a state audit would be less thorough than the forensic audit that has been conducted over the past several months, but noted that a statutory procedure exists for seeking a state audit.

“They have a right to do that. There’s a statutory procedure for it. If it happens, it happens,” the mayor said. “I think what BSW (Brown Smith Wallace) has done is probably more thorough than what the state auditor would do, but, you know, if it meets a need for some folks to have that done by an additional independent third party, that’s fine.”

Greer noted that Brown Smith Wallace was selected as the city’s independent auditor after the city issued a 30-page request for proposals and evaluated the three responses submitted.

“… If you saw the work that went into the RFP, if you saw the analysis of the proposals that we did receive, if you saw that we extended it by a week to make sure we got the opportunity for additional quality work to be submitted, if you read and saw the extent to which we analyzed the proposals that were submitted, I think what you see — I would hope what someone would see is the energy and effort and desire to have a completely thorough, quality, objective, public, independent audit for fiscal year ’03. That is the last budget of the prior administration and I have concerns with it. We tried to close the books … for fiscal year ’03 and it wouldn’t work.”