DETROIT (WXYZ) - Questions are being raised tonight about whether the review of Wayne County’s finances will be fair.
One of County Executive Robert Ficano’s former top appointees is on the team that’s supposed to be taking a hard look at the county’s deficit elimination plan.
7 Action News started asking questions about this deal and a possible conflict of interest last week – and the story keeps changing.
The state of Michigan is spending hundreds of thousands of dollars to have an outside firm review Wayne County’s deficit elimination plan.
But some county insiders are questioning if that review will really be objective.
That’s because the county’s former Deputy Chief Financial Officer, Richard Walker, is on the team that’s looking at the county’s books.
“I think it’s totally a conflict,” said Wayne County Commissioner Laura Cox, (R-Livonia). “It just seems odd of all the people and all the companies they could use, they would use Rick Walker.”
Walker retired from the county in 2009 as a top appointee of Robert Ficano; he worked for current CFO Carla Sledge for an annual salary of $145,000. Walker came back on contract with the county to work for a while in 2010, earning $11,295.56, in addition to his county pension.
Walker now works for Pierce, Monroe & Associates, which just got the $365,000 contract to conduct the unprecedented review of the county’s deficit elimination plan.
7 Action News was the first to report the State Treasurer had asked for bids from CPA firms to conduct the review of what’s been called Wayne County’s “novel” deficit elimination plan. Robert Ficano’s administration wants to take unused fees from grant money for things like mental health, and send the money back to the state. Then the county wants the state to return the money, so it can be used to chip away at Wayne County’s $189 million deficit.
When we raised the question of a possible conflict with Walker doing the review after Pierce Monroe & Associates won the contract, spokesmen for both the Treasurer and the company told us Walker wasn’t going to be on the review team.
Now a lawyer for Pierce Monroe says Walker will be one of five consultants on the team. The team will also include a Project Manager, and the firm's Managing Member, Phillip Pierce is the senior executive on the project, and will do the final review, according to the firm's lawyer Arthur Dudley II.
When 7 Action News asked why the state hired a company that isn’t a licensed CPA firm, we were told the Treasury Department changed the terms of the contract so that the work wouldn’t have to be done by a CPA firm or by a CPA.
Treasury spokesman Terry Stanton said, “To meet the time requirements of the engagement, and because only one firm properly submitted a bid to perform the work,” they amended the contract to meet the 45 day deadline of the review.
Current and former county insiders are crying foul – questioning how Walker, who used to oversee the budget process and accounting procedures in the county, can review his own work.
“It’s crazy,” said former Auditor General Brendan Dunleavy. “Here you have a guy whose sole responsibility was doing the budget and the accounting work for Wayne County. He retired in 2009; he would have played an integral part in drafting any deficit elimination plan they would have had in place. He was on contract in 2010. And now he’s going to audit his own work.”
Dudley issued this written statement on behalf of Pierce, Monroe, & Associates: “Mr. Walker separated from Wayne County in 2009. This engagement focuses on the fiscal year of October 1, 2010 through September 30, 2011 and the period from October 1, 2011 through the current month. Inasmuch as Mr. Walker was not employed by Wayne County during these time periods, Pierce, Monroe & Associates, LLC does not regard his involvement in this engagement as a conflict of interest.”
Dudley also told 7 Action News that former Wayne County Deputy Auditor General Terrell Binion is on the review team as well.
In the past, Phillip Pierce has given $7400 in campaign contributions to Treasurer Andy Dillon and $500 to Ficano.
Stanton denies that Wayne County and Pierce, Monroe & Associates are being given any special treatment. As for the alleged conflict of interest, Stanton says ,"Mr. Walker is an associate on the engagement and not leading it. Other staff at Pierce, Monroe & Associates will be heading up the consulting engagement and it is my understanding they will be responsible for the final report. The State fully expects a fair and impartial report."
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