City of Fort Walton Beach

City of Fort Walton Beach finances to undergo forensic audit after Finance Director arrested

City of Fort Walton Beach
City of Fort Walton Beach

The City of Fort Walton Beach will have a city council meeting tonight starting at 6pm and it has the potential to be interesting.

On February 14th, the Finance Director was arrested on one count of scheme to defraud, one count of racketeering, and one count of money laundering. Read more on that here.

Tonight, Council will hear and discuss the audit and choose how to move forward. Here’s what we can expect:

It will be recommended that City Council award a Letter of Engagement with a firm to conduct the first phase of a forensic audit of the City’s finances. Phase 1 will consist of a preliminary evaluation to determine the overall scope of work for the forensic audit. Phase II includes the testing and analysis based on the information discovered during Phase I. 

Since this is a specialized service to help the City and the State Attorney’s Office determine the scope of alleged embezzlement, the City Council in emergency situations may waive the formal bidding process which the City Manager believes is appropriate under the circumstances. There are various options available to the City for these emergency services:

The findings of the forensic audit will be used for two (2) purposes:

  • Internally by the City to determine the scope of embezzlement, to evaluate policies, procedures and controls to avoid this type of activity from occurring in the future.
  • Externally by the State Attorney’s Office as part of the ongoing criminal investigation into this incident. 

The City’s current external auditor is Warren Averett. However, a State Contract exists under the Department of Management Services for Financial and Performance Audits and is available for the City to utilize. Carr, Riggs & Ingram is a local firm included in the State Contract.

Staff will recommend to the City Council tonight to waive the formal bid process as they would like to get this audit started ASAP. They would then award a Letter of Engagement with an accounting firm to perform Phase I of a forensic audit of the City’s finances.

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