City releases conclusions to court investigation

The city had been conducting the investigation since mid-June after the finance department questioned accounting practices at the court. One court employee was terminated, and a second employee, Administrator Janice Piper, resigned during the investigation.

As part of the process, the city hired a certified forensic examiner with BKD LLC, who determined the missing funds were estimated between $1 million and $1.2 million, dating back to Jan. 1, 2000. The examiner has been asked to expand his look at records to 1997.

Evidence supports an embezzlement scheme first detected by the finance department a year ago, when the court did not adequately explain open items on the city’s bank account reconciliation, the report said. Annual city audits did not uncover the scheme, and preliminary evidence shows that a state audit conducted for 1998-1999 overlooked the discrepancy as well, according to the report.

Click here for a copy of the report.

An investigative committee, led by City Manager Bob Cumley and Assistant City Manager Evelyn Honea, has recommended the chief municipal judge be more involved in the administration of the court and that the court implement and monitor internal controls.

The finance department has begun auditing every process where cash is collected and handled by the city, and computer systems are being modified. The department also will “assume the responsibility for internal auditing and dedicate resources to that function as much as possible,” the report states.

Under its insurance policy, the city expects to receive a maximum of $200,000 in recovery of the funds, minus a $2,500 deductible.

The city also is looking into filing a civil suit to freeze the assets of the terminated employee. A decision will be made as more information is provided through an ongoing criminal investigation into the issue.[[In-content Ad]]