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Controversial Consultant's Contract Expires, Questions Linger

The man hired by the Evansville City Council to provide oversight of the city's finances is now off the city's books. While David Garrett's contract with the City Council has expired, questions still remain.

The man hired by the Evansville City Council to provide oversight of the city's finances is now off the city's books. While David Garrett's contract with the City Council has expired, questions still remain.

The council hired Garrett for $20,000 after the State Board of Accounts found Evansville's bank accounts for 2011 were out of balance. The shortcoming was attributed to poor bookkeeping following a bungled exchange of accounting software, where the state said employees weren't properly trained. Now that the problem has been fixed, some officials say Garrett's services aren't needed nor has Garrett lived up to his end of the deal.

"He has not provided us with one idea on how to make the system better," said City Controller Russ Lloyd Jr.

While some city council members voted against it, the City Council hired Garrett to the tune of $20,000, citing a state audit that recommended more oversight. But questions about Garrett's qualifications quickly emerged.

"I said [Garrett] was a CPA," said City Councilman John Friend (D-5th Ward). "Yes, he did have his license. Yes, he did all that. I misspoke so that's what started it off."

And the controversy continues until now.

Councilman Friend says Garrett will continue working on the city's books from the month of August and September. Once complete, Councilman Friend says, Garrett will have fufilled his contract. But, about that contract, Lloyd says Garrett has not provided to him the monthly reports that were stipulated in the contract.

"We have not seen [Garrett]," Lloyd said. "We have seen only three reports in about a year. All of the reports that have been made available to the Controller's Office, we found numerous errors. Pretty much every report he's given to us, we've had to document all the mistakes and we've provided that to City Council."

"[Garrett] knows his responsibility," Friend said. "I don't have concerns that he's going to walk away from it. He's been very responsive up until now when I've asked him questions."

The question now is whether the City Council will re-hire Garrett. Councilman Friend, one of Garrett's staunch supporters, says that decision will be made when the state's newest audit is released. If the audit comes back clean, Garrett might not be needed.
If it doesn't, Garrett might be re-hired, according to Friend.

"The whole key is to make sure it's right," Friend said. "We move on or make the corrections. I know the Controller's Office has been working very hard on these issues and I myself cannot be critical. I'm not walking in their shoes."

Officials expect the state's audit of the city's finances to come back in early December.

PREVIOUSLY REPORTED

The feud over the state of Evansville's finances continues. A financial consultant suggests the city's bank accounts were out of balance by millions in 2012. The report was placed on City Council members desks before a City Council meeting on October 15th.

David Garrett, a financial consultant hired by City Council, created the report in which he alleges Evansville's bank accounts are not fully reconciled. He writes, "Unexplained variances of over $7.4 million were plugged (adjusted, without research as to the nature or origin of the variance), in order to give the public assurance that everything was reconciled; and that the long ordeal of trying to get caught up with delinquent bank reconciliations was finally over."

The council hired Garrett after the State Board of Accounts found Evansville's bank accounts for 2011 were out of balance. The shortcoming was attributed to poor bookkeeping following a bungled exchange of accounting software, where the state said employees weren't properly trained.

City Controller Russ Lloyd, Jr. responded to Garrett's report through a written rebuttal submitted to the council. In the report, Lloyd reassures council members the city's bank accounts are in balance. He writes, "There is no unexplained variance of $7.4 million. That dollar amount represents the cash due to the water and sewer bank accounts after all fund balances were fully reconciled to the bank accounts."

Lloyd denounced Garret's report saying, "The Finance Department staff found errors on every text page, all 12 pages." He also accuses the consultant of having a "clear lack of understanding" of the city's account system and making "erroneous assumptions".

The state's annual audit of the city's finances is currently underway. Lloyd says he sent the state his reply to Garrett after learning Councilman John Friend, D-5th Ward, provided the State Board of Accounts with Garret's report. In the conclusion of his report, Lloyd calls Garrett's timing unfortunate because it comes at a time when the city is working to achieve a "clean opinion" from the state.

Friend tells Eyewitness News it's important for the state to have both reports so officials can issue an opinion on the matter. "We're going to be going out and borrowing a lot of money and if we lose our credit rating over this it will cost us even more money," said Friend.

While Garrett and the Winnecke administration continue to go head-to-head over the city's finances, both sides agree state officials' findings will be taken as fact. The State Board of Accounts is expected to release findings from the 2012 annual audit in about two weeks.

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