After a monthslong embezzlement investigation, Durango is looking at its internal financial control systems – and Durango City Council supports a deep, citywide audit as part of the process.
Durango’s former finance director, Julie Brown, is suspected of stealing more than $700,000 from the city of Durango over 17 years. Brown is charged with four felonies related to an investigation by the Colorado Bureau of Investigation. As the city picks up the pieces, city councilors discussed a forensic audit during a study session Tuesday.
“Our hope is that it’s an alleged isolated incident, but we need to verify from an outside firm,” said Councilor Barbara Noseworthy. “I look forward to seeing options around that.”
City councilors and staff members planned to reach out to the external accounting firm Eide Bailly LLP about a forensic audit, which could help them identify any financial management weaknesses or possible misappropriations.
Durango has already taken some steps to improve its internal financial reporting and control systems. For example, all city departments are compiling asset inventories and management plans to see what’s currently in place.
The staff conducted its own internal controls analysis and “fortified the fort” by ensuring that the city was following Government Finance Officers Association best practices, said Devon Schmidt, the interim finance director. The Colorado Department of Local Affairs also analyzed internal control systems to identify any potential weaknesses.
The Adams Group LLC, an independent accounting firm used by the city for the first time, is preparing a 2019 Comprehensive Annual Financial Report.
“(The CAFR) basically ensures that a government entity, like the city, complies with the Governmental Accounting Standards Board,” Schmidt said.
Before a forensic audit begins, city councilors need to meet with Eide Bailly to discuss the scope and services included in the audit process, said Amber Blake, interim city manager.
For example, Eide Bailly can provide analyses that would review changes made by the city, identify any missing internal controls and ensure the internal control system is “up to par with best practices,” Blake said.
“There’s absolutely a need for that (forensic audit) to make sure all of our policies and procedures are able to prevent the kind of misappropriations that have happened before,” said Mayor Pro Tem Kim Baxter.
The other councilors also spoke in support of the idea, except Councilor Chris Bettin who was absent from the meeting.
smullane@durangoherald.com
An earlier version of this story misspelled Eide Bailly LLP.
