Firm reviewing Wayne County finances got $4.2 Million in past county contracts

DETROIT (WXYZ) - More concerns are coming to light about the fairness of a state ordered review of Wayne County's Deficit Elimination Plan. 

The 7 Action News Investigators have learned that the firm hired to review Wayne County's finances has received more than $4 Million in county contracts in recent years.

We were the first to report that the State Treasurer had asked for bids from private financial firms for an unprecedented review of County Executive Robert Ficano's "novel" plan.  Ficano 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.

State Treasurer Andy Dillon awarded the $365,850 contract to the Detroit firm Pierce, Monroe, & Associates, LLC.  Now 7 Action News has obtained records that show the firm has received more than $4.2 Million in Wayne County contracts since 1996, many of them requested by the County Executive.

"I don't think anybody can be objective.  They got this [state] contract under suspicious circumstances," said Wayne County Commissioner Ilona Varga (D-Lincoln Park).

When asked if the past financial relationship with the county would compromise the objectivity of Pierce, Monroe & Associate's financial review, Treasury Spokesman Terry Stanton told 7 Action News that "the State expects a fair and impartial report."

The Treasury contract has sparked criticism since it was issued in June.  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, earning about $145,000 a year; he worked for current CFO Carla Sledge.  Walker came back on contract with 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.

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.

But a copy of the original contract obtained by Action News shows Walker was going to be a Co-Project Manager for the review.  The original contract also listed Walker as a CPA, but state records indicate his license expired at the end of 2011.

A lawyer for Pierce Monroe says Walker will now only be one of five consultants on the team.

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."

Pierce Monroe's attorney, Arthur Dudley II, issued this written statement:

"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."

The original request for bids from the state called for a CPA Firm to do the review.  After Pierce, Monroe & Associates was chosen, the contract was changed.  The firm is not a licensed CPA firm.  That has Commissioner Varga upset.

"It ought to be done by a licensed CPA firm that can audit large budgets like we have.  I think this is just smoke.  I don't know if the state really means business, or if they just want to give somebody business," said Varga.

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