Unpaid bills?

City Council, city attorney at odds over internal auditor report

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The Lansing city attorney and Mayor Virg Bernero are challenging a report by the City Council’s internal auditor that alleges the law department is four months behind on paying close to $160,000 in bills for outside legal counsel.

The solution to this squabble would seem simple enough: Release the internal auditor’s documentation.

But the internal auditor, Jim DeLine. told City Pulse last week to file a Freedom of Information Act request. City Pulse did so on Thursday with the City Attorney’s Office.

On Monday, City Attorney Janene Mc- Intyre said she hasn’t seen either the FOIA request or the documents. “I would like to see those [spreadsheets] as well,” she said, referring to DeLine’s report on what she called “alleged” late payments.

On Tuesday, she didn’t return telephone calls.

Thus, specifics on which lawyers may be owed, how much and for how long remain a mystery.

DeLine submitted an audit report on three city departments’ outstanding, unpaid billing obligations on Aug. 13 to the Council’s Committee on Ways and Means. That report found that the city’s obligations related to contracts for mowing its own properties as well as contracts related to vendors sent to private properties by premise inspectors had no outstanding obligations as of June 30 — the close of the city’s fiscal year. However, the Office of the City Attorney did not provide billing information to DeLine by July 24, and he was ordered to reach out to the city’s recognized legal vendors for outstanding bills.

From those letters, DeLine was able to identify what he said were overdue bills. His report identified $32,100,69 in bills less than 30 days old; $9,165.32 in bills between 31 and 60 days overdue; $16,739.54 in billing overdue between 61 and 90 days; $9,473.22 in billing overdue 91 to 120 days; and $158,111.14 more than 120 days overdue.

“It is highly unusual to withhold payment of vendor invoice for longer than 90 days,” DeLine wrote in his Aug. 13 report.

At a meeting Wednesday of the Committee on Ways and Means, the audit was challenged by McIntyre and city Finance Director Angela Bennett.

Committee Chairwoman Judi Brown Clarke read from the City Charter to note DeLine’s authorization to conduct audits and obtain information from vendors.

Mayor Virg Bernero on Tuesday last week sent a letter to City Council President Tina Houghton accusing DeLine of overstepping his authorized powers under the City Charter. The letter asked Houghton to reprimand DeLine.

Bernero also accused DeLine and Brown of conducting a “fishing expedition” with the audit, which also reviewed any outstanding bills for code compliance and the city owned property mowing contracts. That review found there were no outstanding bills.

Bennett took issue with DeLine’s audit during the meeting. She said normal practice for audits was for the auditor to share a draft of findings with the audit targets.

“I am also very concerned that this was released without any review, whatsoever, by myself,” Bennett told the committee.

DeLine did not share the draft findings, which Bennett said had several issues. Sharing draft audit reports is considered best practices, Bennett told the committee. The reason, she said, is it allows for a careful review of the information, clarifications and possible corrections of data before the final report is released.

Brown Clarke noted that current policies and procedures do not reflect that best practice. Instead she said the audits are expected to be placed on file with the Council, the Mayor’s office and the City Clerk — which DeLine did with the report in question.

“I’m just saying this is the process that has been established,” Brown Clarke said. “So there probably needs to be some clarification in the language. But right now it doesn’t say those processes happen before there is a final audit report.”

Later she said, “I want to be very clear there are no improprieties as relates to our process.”

“I have been very prudent in paying our bills,” McIntyre told the committee. “I am not about paying first and asking questions later. But I have not been given an opportunity to speak to the specifics of this. There was a report that came out that based on our review at this point is inconsistent with the information Mr. DeLine provided.”

She did not get into detail about the inconsistencies, but did offer to discuss them at another date.

The meeting was contentious at times because McIntyre was present under threat of a subpoena from the committee. That threat was issued as the committee attempted to obtain information related to retiree healthcare cost-sharing charges.

At issue was providing information to city retirees. The issue has been simmering since 2010, when the Bernero administration changed the formula for those who retired after Feb. 20, 2004, said Denise Estee, a 2005 retiree.

McIntyre in her role as city attorney had reviewed that specific change as well as a change to another group of retirees. Her review, in fact, found the city had inappropriately been over-charging the retirees for their benefits.

But how that partial compensation payment schedule was developed is unclear because McIntyre put her reasoning in a confidential legal memo to the mayor and the Council. As a result of a closed-door session, McIntyre has agreed to provide Council members with a memo which does not contain any of the confidential information and that can be shared with retirees and the public.

After a lengthy and sometimes loud closed session with the committee, McIntyre agreed to provide the committee and the public a memo related to the cost sharing decisions with confidential information removed by Sept. 16.

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