The Outer Banks Sentinel has again published an article on the Outer Banks Visitor's Bureau. In this instance, the paper reports the resignation of the director, Carolyn McCormick, and also outlines reputed extravagances and what we as bankers might call "dual control" issues concerning the handling of expenses.
The article is fairly damning, and if true, raises legitimate concerns. My major complaint here is that almost the entire piece is based upon a source consisting of one former Board member. I have absolutely no reason to doubt either the newspaper or the "source" as I know both the writer and the source. However, charges with this level of gravitas should be backed up by other confirmations, especially, other Board members, past or current. Lacking such collaboration, one still walks away from the issue not sure wherein lies the truth.
5 comments:
If you want to find out about the adequacy of the OBVB internal financial controls all you have to do is request a copy of the audit and any associated management letters. The OB Sentinel has cited these in the past (I believe in a distorted manner), if they don't cite them now then you might conclude that the accounting practices are appropriate. Dual control issues are very basic GAAP concepts. If there are problems they should have turned up in at least one of the last 4 or 5 audits. I would guess they didn't or Sany would have used that.
IMO Just more witch hunt that has already run a very good leader out of our community.
Bob,
As an ex-tax auditor, having been in involved in more than his share of fraud audits, I can say that you, even as an ex-elected official, have little understanding governmental/public entity compliance audits; as preformed by private CPA firms or agencies. If you think the audit firm looked at or gave a hoot about hiring contracts or whether McCormick was paid too much, or spent too much money on plane flights/rooms or paper clips, then you are naive. And, if you think the fact that the CPA firm report attested that the tourist bueau (or the Town of Nags Head) followed "generally accepted governmental accounting principles" means they are squeaky clean, you have a lot to learn. Trust me, it is not in the best interest of these audit firms to look into these matters. They do the job with "audit blinders" on, collect their exhorbiorant fees and hope to get the audit contract again next year. At best, they will tell you the "t's" (debits) were crossed and the "i's" (credits)were dotted; and laugh when they get back to the office. Been there, seen that, more than once.
Ray Midgett
I mentioned the prior audits and the fact they could engage another firm in a previous post, Bob. And, Ray, I disagree with your assessment. Governmental accounting, as you well know, is NOT GAAP based. And the "scope" of the audit, as determined by the engagement letter can easily include such things as travel policies, expenses, verifications, and even contracts. If the Board had too narrow a scope, don't poke fun at the accounting firm. You are correct that they don't care what a person is paid, bit the claims made by Lisa were dual control and expense approval specific, and those are well within the skill set of private audit firms.
Russ,
What firm did the audit on the tourist bureau? Are you saying government tax auditors are not aware of GAAP? And, did the "scope" of the engagement letter (as you call it) include travel policies, travel expense verifications, hiring contracts? My bet is a BIG NO !
I'm not blaming the independant auditors for anything. I'm just calling a spade, a SPADE.
Ray
Ray--if you re-read what I wrote, I did NOT say government auditors were unfamiliar with GAAP, I said that most government agencies (muni, state, Fed, and even some NGO's) do NOT follow GAAP and are not required to do so, therefore audits of these agencies usually are not GAAP conforming. I think J&B did the Bureau audit, to my knowledge only 2 local firms can do municipal and state audits, and only one of those two can do "Yellow Book" Fed conforming audits (such as a vendor wanting to do FHA loans, etc).
I have no idea what the engagement scope was for the firm that did audit the Bureau. In any event, the salary of the Director is immaterial to an audit, unless she was paid outside of her contract. Ditto on contractual issues, some would come under the purview of an auditor (were payments to a vendor made under the contracts rules, were they approved by the proper authority, etc), but other contractual issues would be more in line for an attorney to review relative to "compliance".
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