Tuesday, July 9, 2013

Walls days more than likely numbered

Richard Walls
I've always gotten along with Knox County internal auditor Richard Walls, but he's certainly rubbed people the wrong way. And it's always been the wrong people, too.

Mayors, top commissioners and, not the least, audit committee chairman Joe Carcello, who led this morning's revolt against the (let's call him "embattled") auditor.

Only Mary Kiser voted to keep him. Carcello and Knox County Commissioners Ed Shouse, Dave Wright and Amy Broyles voted to fire him. The audit committee only makes recommendations, so the full commission will talk more about it on Monday.

Heh, what a coincidence: The same day they talk about firing their auditor (the position reports directly to the commission), they'll also talk about replacing the trustee, too.

Anyhoo, I somewhat expected this move.
Walls' office in the past couple of months has overseen two audits - one that looked into the county's purchasing cards practices and the other into its ethics policy - that have raised eyebrows.

And not about what he looked into, but rather some of what officials say are unfounded accusations.

Afterward, he and Carcello got into a somewhat heated/sarcastic debate about each of them. Walls backed off somewhat, but not all the way.

I'm not going to go into the details of the audit. I wrote about them awhile back, but essentially it's about "risk versus reward," and Walls felt the county should take a more conservative approach and the mayor's office feels that by using them more often, the county gets back larger rebates (and no, these aren't those Pilot rebates).

It certainly makes sense and if that's the position you take - and Carcello agrees with the position - then there's not point dying on the hill over it. Walls didn't agree, though, and I can respect that.

So, we'll see what happens in two weeks, but if Shouse, Broyles and Wright don't change their minds, I don't think he'll make it. I know that at least three other commissioners have privately said that they will not vote to support him.

Plus, a number of commissioners think that outsourcing the office, something they've discussed number times, will save the county money. It won't, but whatever.

That's another issue.

Also, another matter is whether Walls will sue if fired.

My guess is yes. A whole bunch of folks. 

Expect this to turn into a mess.

1 comment:

Unknown said...

The Charter clearly states that the authority of ALL audit functions lies in the Audit Committee.

The financial audits that occur annually are done by the external auditors, Pugh & Co., KPMG, Rodefer Moss, etc.

The internal audits have primarily related to performance audits.

Walls submits an annual work plan and status reports to the Audit Committee. Additionally, he submits employee evaluations of his staff to the Audit Committee for final approval. The last evaluation signed off by the Audit Committee for Mr. Walls was for the calendar year 2008.

If there was a problem with the "quality" of his work, why not document that in an employee evaluation or why not mention it during any number of audit committee meetings?

About the "quantity" of his work, that's the Audit Committee's responsibility, Walls takes direction from them. There are annual or reoccurring performance reviews or other work that is required that is known by Mr. Walls and included in his annual work plan which is turned in to the Audit Committee for their approval.

If there is additional work that the Audit Committee wants done, such as The Beck Center audit, the Public Building Authority audit, the audit of the School System's Booster-type accounts, he's directed to perform these reviews by the Audit Committee and they are privy to this work at all stages until completion. If they want him to go in another direction or look into something further, they direct Walls to do it.

The Audit Committee determines the workload.

If there are complaints about the Internal Auditor not looking into "high-risk" areas, it begs the question was he directed to?

It seems odd that the Internal Auditor would be asked to review the financials for the Trustee's office when External Auditors, Pugh & Co. and KPMG were contracted by the Audit Committee to perform this very same work. (And the KNS has reported over the years some of their findings.)

From the Knox County Charter


Sec. 2-275. - Audit committee.

An audit committee shall be established by the county commission to provide oversight and direction of the audit function. The primary responsibility of the audit committee shall be to oversee all audit activities, from the selection of the auditors to the resolution of audit findings. The audit committee will have access to the work papers and reports of the auditors, as well as access to audit work plans.

Sec. 2-281. - Coordination through audit committee.

All audits, reviews and limited examinations (to include all funds and account groups of the county as well as its component units) shall be coordinated through the audit committee. This includes, but is not limited to the annual independent audit by certified public accountants of the accounts of the county and of every county office. (Sec 2.02.B. of the Charter of Knox County, Tennessee).

(Ord. No. O-02-8-105, § 9, 9-23-02; Ord. No. O-10-3-104, § 3, 4-26-10)