Mayor: Firm pledges to get city out of bind with overdue audits

Mayor: Firm pledges to get city out of bind with overdue audits


A Pearl accounting firm alderman hired Tuesday night has, according to Mayor James A. Young, pledged to get the city of Philadelphia out of a potential bind with the State Auditor over required annual audits that haven’t been filed for almost half a decade.

The city’s previous accounting firm, Watkins, Ward and Stafford, resigned Monday afternoon apparently out of frustration and concern that city officials haven’t been transparent enough and thorough with documentation, those who have seen the letter said.

City officials refused to provide the Democrat with copy of the letter from Watkins, Ward and Stafford circulated at Tuesday night’s regular meeting.

The board ultimately hired the firm of Windham and Lacy PLLC to perform audits for fiscal years 2018, 2019 and 2020 after much discussion about the implications of audits being overdue.

“These people (Windham and Lacy) told us they deal with the State Auditor’s office all the time,” Young said. “All we need to do is say go ahead and they will get us out of this.”

Ward 2 Alderman Jim Fulton had asked if the city should contact the State Auditor’s Office since they are so far behind on the audits.

“Let me ask y’all a question,” Fulton said. “Since this thing is behind, do we need to notify the State Auditor?”

City Attorney Robert Thomas told the board he received a call from a Watkins representative late Friday afternoon telling him the company would be sending a letter of resignation.

Young said he immediately began looking for a new firm and that Windham and Lacy came highly recommended from people they have done business with.

Young earlier in this week had told the Democrat Watkins, Ward and Stafford was resigning because they did not have the manpower, but the letter indicates otherwise, according to those who have seen it.

Aldermen raised concerns about the resignation that apparently included wording the city had not signed a standard letter of engagement that accounting firms are required to have with any client.

“We only got this 30 seconds ago,” said Ward 1 Alderman Justin Clearman. “So, if we would have gotten them signed copies of a fine line quote … They can’t do it without it. So, it’s our fault that they aren’t going to do the audit?”

Young replied, “They got paid for it. They sent back what they had, so I don’t know.”

Clearman pressed the issue of the city withholding information.

“So, I am reading here that we are not providing all of the information we need to get the audit done?” Clearman said.

Attorney Thomas advised aldermen they could call the Watkins, Ward and Stafford manager.

“She (the Watkins manager) will be very honest if you called her. I asked her the same question,” Thomas said.

Ward 4 Alderman Shaun Seales asked, “She didn’t give you an answer?”

Thomas said, “Yes she did. But I’m not going to say it here.”

Young himself declined a reporter’s request for a copy of the letter, but the Democrat intends to file a public records request and get the letter, said James E. Prince III, the publisher.

Clearman said the board needed to investigate why Watkins, Ward and Stafford was dropping the city account.

“It’s our job to call her about why we got this letter and devise our own opinion on that,” Clearman said.

Fulton wanted more answers as well.

“As far as I am concerned, this is not finished. Right? It is to be looked at and studied,” Fulton said.

Clearman spoke of the haste.

“We are about to act on a motion to move on to this other company and we have got to do it,” Clearman said. “This is a Hail Mary.”

Being on the right side of the law was a concern Fulton had.

“Do we want to notify the state auditor?” Fulton said. “I want to be on the up and up.”

Young assured him they were.

“We are going to be on the up and up,” Young said. “They (Pearl firm) said they are able to do it, and if the State Auditors call, they are able to work with them.”

Clearman said, “I don’t want to be inappropriate here but if we are on the up and up, we wouldn’t be (at this point)?”

Clearman made the motion to hire the new firm and Fulton seconded it. Aldermen approved the motion unanimously.

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