August 9, 2018 500 AM
PRESIDIO – The City of Presidio has denied an open records request by the Presidio International for a forensic audit ordered by the city council earlier this year that stems from the city’s past financial problems.
In doing so, city attorney Rod Ponton may have shed some light in the twists and turns the matter is taking.
The forensic audit – different from a fiscal audit – was discussed in an executive session at last week’s council meeting. No action was taken when the council returned to open session.
A letter from Ponton for a Texas Attorney General opinion to keep the contents of the audit secret – for now – points in the direction that a criminal investigation may be underway.
A forensic audit is an examination and evaluation of a firm’s or individual’s financial information for use as evidence in civil and criminal court.
The audit should be withheld “as the report findings are in the process of being followed up with further information requests and demands for repayment of money,” Ponton wrote the AG. “I additionally anticipate civil and criminal litigation to follow from the report.”
The International received a copy of the letter at last week’s meeting, compliant with Texas Open Records laws to respond to an open records request within 10 days. It is in a custodian of records’ right to deny a request, and be upheld – or ordered to release the information to the requestor – by the AG.
The forensic audit was ordered in January after the City of Presidio received the results of fiscal audits for the years 2013, 2014, 2015 and 2016. All were adverse opinions, or an “F” in general accepted accounting practices.
The last audit the city had performed and adopted was in 2012, and it, too received an adverse opinion.
An audit by a Certified Public Accountant outside the political subdivision being reviewed is supposed to be performed each year. They weren’t, but CPA Doak Painter finally brought the city out of its financial morass by submitting the late audits for council to approve and accept – as adverse – and move forward. He cited a lack of documentation and noted the discovery that hundreds of thousands of dollars owed to the Internal Revenue Service for the city’s portion of employees’ payroll taxes hadn’t been paid. The city has since paid the IRS more than $800,000
in back taxes, penalties, and interest.
On Tuesday, the city terminated Presidio Police Chief Marco Baeza, who had the dual title of police chief and city administrator from April 2011 to October 2016, the years the audits weren’t performed. During those years, certain bookkeeping duties weren’t met, and fiscal audits weren’t performed, and the city failed to file 941 reports to the IRS and failed to pay the federal withholding from city employee checks, as well as the Social Security and Medicare withholding from the employees’ checks, and didn’t pay the city’s matching Social Security and Medicare tax.
It was only after the employment of new city administrator Joe Portillo in the fall of 2016 that the lapsed audits were performed and the IRS debt was paid.
Ponton additionally wrote the AG that “specifically, the report revealed evidence of wrongdoing committed by various businesses and individuals contracted by the city, and that evidence is not public. Moreover, the City of Presidio has already initiated a claims process by delivery of demand letter on July 25, 2017 to at least one of the parties identified in the report; the letter informs the party of the city’s intention to pursue a cause of action for the repayment of funds due to the city regarding work the party never completed. The city is also in the process of pursuing similar claims against other parties identified in the report.”
As they say on TV, stay tuned.
