Crockett EDC suspended following forensic audit

The Palestine Herald-Press
By Jason Jones jjones@palestineherald.com
January 11, 2023

Following significant questioning over financial activities and practices in recent years, Crockett City Council met Monday night to discuss a forensic audit report of the Crockett Economic and Industrial Development Corporation.

City officials had requested the assistance of accounting firm Weaver and Tidwell to review the actions of CEIDC, and were presented with their findings during Monday night’s meeting.

Travis Caser, Managing Director of Weaver and Tidwell said the audit began in September. He, along with colleague Michael Taylor, presented the report that included several findings including annual budgets, bank statements and employee compensations.

The report showed that Weaver and Tidwell interviewed 11 individuals, including employees, both current and former board members and city personnel.

Caser said they were able to obtain all the bank statements except for six months that were missing or incomplete, totaling over $451,000.

“We did not have check images, and the table shows which ones. January 2014 and then September 2017 are the range the six months fall,” said Caser.

The audit also found the CEIDC had several years of violations of the open meetings act including unidentified meeting agendas and failure to post meeting notices.

Following the presentation of findings, a visibly irritated councilman Darrell Jones, who is also an ex officio board member of CEIDC, pressed Caser for more information.

“Was there any money missing, stolen or misplaced?” Jones asked.

Caser followed with an attempt to explain the findings and their purpose, but was interrupted several times by Jones.

“I appreciate what you’re saying, but that still doesn’t tell us,” Jones said. “You did this whole forensic report on economic development. I think the council should know if there is money missing from any of your findings.”

As Caser attempted again to explain the misuse of funds and the lack of authorization being a violation of government code, he was interrupted once again.

“So you’re saying there is no stolen money,” Jones said. “There is nothing missing in reference to your report.”

“Fraud is something that is determined by a jury,” Caser said. “I cannot, or anyone in this room cannot, make a determination of fraud. And so if that’s what you’re getting me to say or not say, I’m not going to do that. The report speaks for itself.”

“One thing you can observe, it was a good thing that they went back for a broader scope,” said Crockett Mayor Ianthia Fisher. “We kind of debated about that. But over the years you can see there’s been a lot of bad practices, for lack of a better term. Is that a good thing? No, it’s not a good thing but it is something that happens when you have an opportunity to make a correction and you fail to make those corrections, it appears that it is okay. So I know there is a lot of responsibility for those things that have happened and it’s the council’s responsibility to ensure that they don’t continue to happen.”

The council went into closed session to discuss all the details and emerged with a motion, read by Mayor Pro Tem Mike Marsh.

“I make a motion to temporarily suspend all activities of the Crockett EDC, and request our police chief open an investigation into each of these audit findings and determine all responsible parties for financial and operational misconduct of this corporation. He can request outside support as needed during the investigation. The Executive Director and office staff will be placed on paid administrative leave and will comply with all investigations by providing full access to EDC records in the office. None of the EDC staff or board members will conduct business or have access to the EDC office unless the Police Chief is present. During this investigation no EDC staff or board members will sign checks or use credit cards. The Mayor and Mayor Pro Tem will be added as signors to the EDC checking account to pay all existing and approved debts after they are brought to the council for approval.”

The motion was approved by the council with councilman Jones abstaining from the vote.