Pr. William’s disbanded internal audit department was ineffective, report finds

Prince William County’s internal audit department was ineffective, its work was incomplete and the department did not abide by its own quality-control guidelines, a peer review of the county’s former internal watchdog has found.

The department’s former acting director, Lawrence Keller, has raised questions, though, about the quality of the peer review, given that the audit department’s former members were not given a chance to comment on or respond to the report. He said in an e-mail that he questions what motivated a “taxpayer-funded” review of a defunct department.

The county’s audit department was disbanded and its work was outsourced to a private contractor, McGladrey, in November after Prince William Board of County Supervisors Chairman Corey A. Stewart (R-At Large) raised concerns about the department’s effectiveness.

Before the board voted on the matter late last year, members of the internal audit department sent a strongly worded memo, obtained by The Washington Post, to supervisors, denouncing the plans to close the internal watchdog. Supervisors voted, 6 to 1, to disband the department.

“Taxpayers will never be able to count on learning the truth about what may be going wrong in the county” without the department, that memo said.

The department was in charge of making sure county agencies were operating efficiently, that financial statements were accurate and that county personnel complied with laws and regulations.

The peer review of the department’s work from 2008 to 2013 said the work would “seriously impair or preclude the internal audit activity from performing adequately in all or in significant areas of its responsibility,” according to the company’s findings.

Auditors’ work was only partially completed, hours were not properly tracked and delays were common, the review found. The report did not find, however, that information in audits was flawed or that actions taken by the watchdog office were inappropriate.

Stewart said the latest review of the audit department vindicates his position that the department was troubled. The review, conducted by Milwaukee- and Minneapolis-based auditor CliftonLarsonAllen, was triggered by the fact that former department head Robin Howard, who led the department until January 2012, had left, Stewart said.

Reviews are generally conducted, Stewart said, after department heads leave the county.

The department was also reviewed, Stewart said, because the FBI contacted Prince William officials after Howard was charged with stealing at least $30,000 from the District chapter of the Institute of Internal Auditors, a global association that sets standards for people who work in professions that prevent or detect financial fraud. Stewart said that a review of county financial data revealed that no funds had been stolen.

Billy Hicks, Howard’s attorney, declined to comment on his client’s criminal charge. A trial has been scheduled for October. Howard also did not immediately respond to a request for comment on the report.

Keller, who took over as interim director after Howard left, said in an e-mail that the CLA peer review was “one-sided” given that he and other former members were not given a chance to respond to its findings.

He said that before his departure, he and others had requested to respond to the findings before the report was complete.

“The final report contains misleading, out of context, and/or inaccurate statements which we could have pointed out if given the opportunity,” Keller said in an e-mail. “We do not know . . . whether the primary purpose of the taxpayer-funded review, conducted . . . after [supervisors’] decision to replace our department with a contractor, was to attempt to justify their decision that was thought by some people to be politically motivated,” he wrote.

At the time, auditors had speculated that the county moved to outsource the department’s work because they had completed an audit that criticized the volunteer firefighters’ pension fund. Auditors found that the pension fund had been mismanaged by volunteer and county officials.

Stewart has denied that that was the motivation behind disbanding the internal watchdog department.

“We’re glad we’re on the right track now and that we’ve got an outside auditing firm that’s doing work in a more productive way,” Stewart said.

Jeremy Borden covers Prince William County, Va., for The Washington Post.
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