Nearly one year after Covington discovered its former finance director Bob Due had stolen almost $800,000 over more than a decade, the city finance department has dramatically tightened its financial reporting procedures. It is in the process of installing new software and is reorganizing the financial operations of every city department.
New Finance Director Lisa Goetz (a former auditor and comptroller) now requires:
- Requisitions to be approved by the City Manager
- Checks to be examined by both the City Manager and the Finance Director
- Invoices to be matched with checks and packing slips
- Each department to take ownership of its budget
Goetz says, "These are pretty basic, 101 internal control procedures, segregation of duties, so other cities have the same or similar set-up. It's just that we needed a massive upgrade in our software." The Finance Department is also now off limits to the general public. Payroll is being outsourced.
In addition, Covington has hired:
- An assistant finance director
- An internal auditor
- An information technology director
City Manager Larry Klein emphasizes greater transparency. Covington's budget is on the city's website and there is a workplace fraud hotline. "I think we have a good start but there is a lot of work to do. There's probably years worth of work to do to repair. It's not just a matter of recovering the money, it's completely reorganizing the financial operations of the city."
Klein says Covington hopes to recover all of the money Due stole. He says the city has initiated 8-10 lawsuits, not only against the former auditor but banks, auditors and software companies.