Politics & Government

U City Selects New Firm to Provide Audit Services

University City has selected the CPA firm Schowalter & Jabouri to conduct the annual audit of the city.

Four local auditing firms presented their proposals on Monday night in hopes of being chosen to do the annual audit for University City.

In attendance were Mayor Shelley Welsch, City Manager Lehman Walker and councilmembers Arthur Sharpe Jr., Lynn Ricci and Stephen Kraft.  

The four firms were brought in one at a time to present their proposals. They included: 

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The city chose to engage the services of Schowalter & Jabouri on the contingency that the contract be reviewed by the city manager and city attorney. However, before the decision was made, the group grilled the various firm officials.

When asked if University City's recent state audit posed any particular challenges, two of the firms weren't aware of the action.

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"I did not know that you were undergoing a state audit, so that would be something I would have look into," said Richard Gratza, partner of Keber, Eck & Braeckel. "We actually underwent it," Welsch said.

James Schmersahl of Schmersahl and Treloar was also caught off guard by the question. "Well, I'm chagrined to report I did not review that audit. I did not know it was out there, so shame on me, I should have."

A third firm was more familiar with the audit, but only slightly.

"I was aware that there was an audit. I didn't study the results extensively, but I don't think that there were any issues that caused particular concerns," James Torti of Schowalter & Jabouri said. In fact, the findings of the audit  significant financial mismanagement.

When pressed by Walker to give an example of an issue raised by the state audit that his proposal addressed," Torti said. "I don't recall. Other than there was an audit. I honestly don't recall." 

After the meeting, University City Patch asked Walker whether the city should have made the firms aware of the audit. "My expectation would be that those who are interested in providing audit services to University City would be aware of the audit," Walker said.

The fourth firm—Hochschild, Bloom & Company—was aware of the audit, because it has been auditing the city's financial statements for 13 years, including the time that fell under the state audit review.

"Do you guys think you missed something?" asked Kraft, who noted that the firm failed to mention the city had more than $1 million in uncollected garbage fees in its last four or five audit reports.

After the presentations, the assembled group began deliberating which firm to choose.

"I do not think we should hire the firm (Hochschild, Bloom & Company) that we had for 13 years. I think that was a bad practice," Welsch said. "I think they've been here too long," Kraft said.

While some city's have bylaws stating that audit firms be changed every three to five years, University City has no such restrictions.

I liked Schowalter & Jabouri," Welsch said. "I know that the answer about the audit was not his  (James Torti's) finest hour. I think, however, overall, his presentation was the best." She was impressed by the team he planned to put together to work on the city's books and the detail of his presentation.

The runner-up for the group was Kerber, Eck & Braeckel. In the end, however, the group went with Schowalter & Jabouri.


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