The Reading Parking Authority will conduct financial and forensic audits of last year’s accounts and transactions.
In two separate actions, the authority board of directors last week voted unanimously to order both audits.
A financial audit is a routine assessment, performed annually, while a forensic audit is an in-depth examination of activities that can be used to find evidence of illegal or fraudulent activity.
The decision to order a forensic audit was made in response to the allegations of two members of the city watchdog group We the People.
The Rev. Evelyn Morrison and Sheila Perez, both of Reading, allege they found evidence of past financial mismanagement and discrepancies in financial records and board meeting minutes, including an unauthorized transfer of $79,000 to an account in the Cayman Islands and a $12,885 payment to an area office furniture reseller that was not recorded in meeting minutes.
Over the past year, Morrison and Perez have frequently attended authority board and City Council meetings where they have repeatedly called for a forensic audit of the authority’s accounts.
“I’m tired of listening to the same, the same problems,” authority board member Adela Rodriguez said. “And, you know, we need to put it to rest here (at the board meetings) and we need to put it to rest for the public.”
Rodriguez’s comment came before she moved to order a forensic audit.
Morrison first made the allegations of financial mismanagement at a City Council meeting in August.
Nathan Matz, former authority executive director, refuted the allegations at a subsequent council meeting in September.
Matz said the transfer was a fraudulent financial transaction that resulted after an employee’s email account was hacked.
The security breach was discovered within 24 hours, he said, and all employees were cleared of any criminal wrongdoing.
In an unrelated move, the authority board at a special meeting Dec. 27 voted to end Matz’s employment agreement effective Dec. 31.
The no-fault termination of Matz’s contract was preceded by a significant turnover on the board and followed by the resignation of then-board president Keith Eschleman, who had cast the sole vote in favor of retaining Matz.
The board in January appointed Rafael Batista as executive director.
Batista’s appointment was followed by a change in other authority top management, including the hiring of Josue Vega as finance director.
Past financial audits did not reveal anything amiss, Vega said last week. However, he noted, forensic auditors are trained to spot things not always detected in routine financial audits.
“We need somebody who’s the best in the class, knows what they’re doing, has a history,” he said.
The intent of conducting the forensic audit, he noted, is to ensure all is as it should be.
“We just want to make sure we are clear here,” Vega said. “The way we were handed this organization, it was not clear cut. Things were not as clear as they should be. And in order to do a proper audit, things need to be in the proper places, especially in accounting. That’s what I want to make sure.”
Source: Berkshire mont
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