Forensic audit won't come cheap

Parking deck inquiry discussed
An audit of the downtown parking deck project could exceed the cost of the city's annual audit.

The search for criminal wrongdoing in Augusta’s Trade, Exhibit and Event Center parking deck project could cost more than $200,000, officials on a subcommittee that guides the selection of a forensic auditor said Monday.

That is more than the city pays its external auditor to perform an annual audit of all departments. Finance Director Donna Williams, who serves on the subcommittee, said that cost averages about $191,000.

Also, well-paid “professionals,” such as bond attorneys, will expect the same rate they were paid to conduct TEE-related transactions when they respond to inquiries from the forensic auditor, Augusta senior legal counsel Wayne Brown said.

The subcommittee was established after auditors who responded to the city’s January request for proposals asked about the budget for and scope of the inquiry.

“One of the questions that was continually asked was what was our budget,” said Procurement Director Geri Sams, who is on the panel.

The Augusta Commission voted in December to have a forensic audit performed on the parking deck deal after learning, among other things, that the city built the deck on land it didn’t own and was partial collateral for a bank loan and that it had traded another corner parcel with a state senator so he could avoid capital gains taxes.

The landowner, 933 Broad LLC, has ties to management of The Augusta Chronicle’s owner, Morris Communications Co. Jim Plunkett, a special city counsel for the deal, said the city built on “air rights” to preserve the tax-exempt status of bonds that were issued while allowing the landowner use of ground floor parking spaces. The city owns only the deck and the space above it, not the dirt beneath, with the exception of 0.07 acre.

At the time, 933 Broad President Paul Simon said the firm would transfer the land to the Augusta Land Bank Authority to dispel commissioners’ concerns, but Brown said the transaction hasn’t occurred yet.

Other questions that bidders have include where exactly to look and what to look for, Sams said. The forensic auditors will be simultaneously preparing to be witnesses in a criminal case if wrongdoing is found, she said.

Commissioner Bill Lock­ett, the chairman of the subcommittee, said the forensic auditor should at least examine land ownership, the lien, the land swap, the general contractor who performed the work and the city’s agreement with Marriott International, which will operate the center, now known as the Augusta Convention Center, and parking deck.

“Was that agreement properly prepared, or was it prepared for the Marriott, as opposed to the city?” Lockett said. Brown asked him what his suspicion about the management agreement was.

“My suspicion is we’re not getting a fair share of the proceeds,” Lockett said, handing Brown a list of questions.

Sams recommended that the date of a May pre-bid conference with vendors be moved to mid-June so the group could further develop its recommendations.

Brown, Sams and Williams said they would forward recommended responses to vendor questions to the commission before the commission finance committee’s next meeting May 29.

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