Auditor’s spokesman details Broken Arrow process, audit process in general

By Patrick B. McGuigan

Published: 28-Aug-2010

After years of steadily building grass roots pressure and reporting, including news stories from CapitolBeatOK, allegations of criminal wrongdoing are now front and center in the Broken Arrow public school district.

Major news stories yesterday and today (Friday and Saturday, August 27 and 28) on Oklahoma City radio station KTOK, in the Tulsa World and on Channel 6, the CBS affiliate in Tulsa, provided the breaking news. Among other things, Attorney General Drew Edmondson has requested a criminal investigative audit of the school district.

The office of Auditor and Inspector Steve Burrage on August 18 presented to school officials an audit the district requested requested 18 months ago. A second “exit interview” is scheduled for Tuesday (August 31), CapitolBeatOK has been told.

A draft version of the original audit is circulating among news organizations, with the final and official version slated for public release on Thursday, September 2. In response to a series of questions from CapitolBeatOK, the auditor’s spokesman provided greater detail about the Broken Arrow process, and about audits in general.

Responding to question about the August 18 exit interviews the auditor’s office held with Broken Arrow school officials and the district’s controversial law firm, Rosenstein, Fist & Ringold, Trey Davis of Burrage’s office said after that meeting: 

“We complied with our statutory requirement to meet with the Broken Arrow School Board to conduct an exit conference on its requested audit of allegations contained in a taxpayer notice letter. As to the process, we will consider the comments and information gained from the meetings with the members of the Broken Arrow School Board and Superintendent [Jarod] Mendenhall.”

Sources have told CapitolBeatOK the sessions on August 18, held with no more than two board members at a time to avoid open meeting law violations, were sometimes contentious. Asked if audiotapes of the session with the firm and district representatives were available, the auditor’s office said, “The exit conferences were not recorded.” 

CapitolBeatOK learned that the office of Attorney General Drew Edmondson met with peers from the auditor’s office early this week.

In response to questions, Davis said, “The meeting with the attorney general was on Monday, August 23. The meeting began at 4 p.m. and lasted about 45 minutes. Attending the meeting from our office were State Auditor Steve Burrage, Deputy State Auditor Michelle Day and Ricky Branch, Director of the Local Government and Special Services Division. I believe AG Drew Edmondson and [First Assistant Attorney General] Tom Gruber were present from the AG’s office. The meeting regarded the Broken Arrow public school audit.”

The auditor’s office is holding a second “exit interview” with the district and its lawyers before next week’s release of the final version of the audit. While some sources have said that second meetings with audit “customers” seem unprecedented, in response to questions from CapitolBeatOK, Davis provided details to the contrary:

“A second exit conference (or more) isn’t unprecedented. It doesn’t happen often but it does happen. In this case, the Board requested a second exit conference and, as our client in this audit, we have offered to meet with them a second time.” Davis said, “If we do meet with the board members again, it will not re-engage (as it were) the 14 day waiting period required by statute and will not delay the release of the audit.” Davis subsequently told reporters a second “exit interview” has been slated for August 31. 

In response to CapitolBeatOK’s questions, Davis listed the following recent or ongoing audits in which two or more exit conferences occurred: Oklahoma Department of Education, Tulsa County, Cleveland County, Atoka County, Osage County, Grant County, Caddo County and numerous Emergency Medical Service district audits.

Davis said the Auditor’s office was unable to provide an estimate of how frequently two or more exit interviews are provided in conjunction with audits. He told CapitolBeatOK, “We conduct hundreds of audits each year and every audit has at least one exit conference.”

CapitolBeatOK asked Davis if the forthcoming official audit is being revised from the referenced August 18 draft. Davis responded, “The audit is in draft form and has not been made public so I am prohibited from discussing its content. My inability to comment should not be construed to mean that a change has occurred between August 18 and [August 27], nor should it be construed to suggest that no change has occurred. As for the audit process in general, every audit undergoes review and revision from the time it is initially drafted until it is signed and released by the State Auditor.”

He continued, “An audit is reviewed by several sets of eyes to ensure that the final product is accurate and that any findings are supported by facts. The audit is cross-referenced with its supporting work papers. It is an arduous, time-consuming, methodical process. It is a responsibility we take very seriously because our audits have the potential to impact the lives of individuals as well as the entity being audited. It is a safeguard on behalf of taxpayers. An exit conference, whether for a financial, operational or investigative audit is an opportunity for the Auditor’s Office to present its findings to our client.”

In customary audits, “the client has the opportunity to provide a written response to any finding which is included in the final report. The exit conference provides another opportunity to ensure the accuracy of our report. If, during or subsequent to the exit conference, information or documentation is provided that is relevant to the audit report, that information is taken into consideration and, if necessary, the draft is revised to accurately reflect the finding on a given objective.

“During the exit conference on an investigative audit, the same courtesy to provide comment, information or documentation regarding an audit finding is afforded the client. Although those comments do not appear in the form of a written response to an audit finding in the audit report, they are still taken under consideration. As with any other audit, if the information is relevant to the finding then the draft may be revised to accurately reflect information not previously provided or considered. This doesn’t mean the audit is changed, it may simply be the inclusion of a sentence noting that ‘B’ provided ‘C’ in response to ‘A.’

CapitolBeatOK has sought copies of prior drafts of the forthcoming audit, and of working papers connected to the Broken Arrow audit process. Davis told this reporter, “A draft audit report is not a public record. By its very nature, it is a work in progress. The public record is the official report that is signed and published by the State Auditor.”