City leaders angry about audit letter

Memphis City leaders were angry Friday about a heavily delayed audit letter that points to serious management problems in the city finance office.

At budget hearings downtown, it was on everyone's mind. The letter shows that during the last budget year, finance leaders were making serious mistakes that may have cost the city millions of tax dollars.

While city leaders look to repair their flagging budget, they're now dealing with bad news from the past.

A scathing letter from city auditors that has the council's budget chairman Jack Sammons calling for a review of resumes of everyone still in the finance department. Carol Chumney is again calling for another independent audit.

Council Chair Tajuan Stout Mitchell is floored. "I just can't imagine an operation our size not reconciling your bank statements on a regular basis. I just have a very small household, but I guess I call my bank every morning to see where I am," she says.

They knew 2005 was a bad year. But this management letter from auditors Watkins and Uiberall shows that finance leaders were waiting months - in some cases years - to balance city checkbooks.

That the city was still listing as assets buildings that didn't exist anymore like Tim McCarver stadium and buildings it doesn't own like the Stax museum and Lorraine Motel and that multiple city funds were poorly managed and many were simply losing money.

Chief Financial Officer Robert Lipscomb says the city is moving beyond the bad news. "I think we inherited a situation that was there and it is what it is and all you do is move forward. To me it's no different from the financial situation... That that was then and you put it in perspective and all we're doing is trying to move forward and correct those past issues," he says.

Council members are also angry because the letter is dated March 29th but they only got it in their mailboxes yesterday. Finance leaders will make a presentation about on Tuesday.