Examining effects of forensic audits amid debate between mayor and city council over Columbus finances
COLUMBUS, Miss. (WCBI) – Mayor Keith Gaskin says he will continue to advocate for a forensic audit, even after the city council overrode his veto of their decision not to authorize one.
He says many Columbus residents feel the same way.
“What happened to our budget this time? We thought that we had $1.5 million that we did not,” he asked one of the city councilmen. “Does that not give people concern?!”
Mayor Gaskin gave that impassioned plea during his press conference Tuesday as he and members of the city council continued to go back and forth over whether or not to conduct an investigation into the city’s finances.
“A fraud audit or forensic audit is going to result from some evidence that’s been provided that there’s a problem somewhere,” says Dr. Shawn Mauldin, director of Mississippi State’s Richard C. Adkerson School of Accountancy.
“We’re not trying to cause anyone to feel like they’re being sought after or (accused) of anything,” Mayor Gaskin says.
The proposed audit would review city financial records from the past seven years and could cost anywhere between $23,000 and $275,000.
Dr. Mauldin says the goal of a forensic audit is to investigate financial misconduct of any kind, intentional or not.
“Fraud, embezzlement, tax evasion, maybe valuation disputes and other irregularities,” he said, listing some examples.
Dr. Mauldin says these kinds of audits are usually focused on something specific, otherwise the cost of the audit could outweigh the benefits.
City councilman Stephen Jones of Ward 5 is among those who do not believe there is evidence of a problem to focus on.
“The (district attorney) who prosecuted the case, he can tell you, there’s nothing else there,” he says. “I don’t feel there’s anything else there.”
However, Dr. Mauldin says a forensic audit has the potential to stop the bleeding and provide relief for tight budgets in cities like Columbus.
“If they’re detected early enough, it could potentially keep the company from bankruptcy,” he says. “We’ve seen several high-profile fraud cases where the companies have gone bankrupt as a result of it.”
Dr. Mauldin even says that oftentimes, the results of these audits find that the internal controls in place to create checks and balances simply need to be tightened up.
Mayor Gaskin had proposed funding the audit with citizen donations rather than taxpayer money.