When Will State Audit Of MSD Be Complete?

Oct 18, 2016

Credit Sarah Ramsey

There is still no timetable on when a special state audit of the Metropolitan Sewer District will be complete. 

Work on the review has been underway since February.

Council Member Kevin Flynn said he has talked with officials in the state auditor's office and they are not releasing any information about the audit.

"The special investigations unit will not report even on the status of the audit officially until the audit is complete," Flynn said. "They don't discuss any preliminary findings; they don't discuss even really all the things that they're looking at."

Deputy City Solicitor Terry Nestor says any requested MSD documents have been turned over to the auditors.

"I think they're probably through the process of getting all the documents together and, really, now they’re doing whatever they do in their audit process," Nestor said.

In a February news release, the state auditor’s office said the review came at the request of Hamilton County and Cincinnati officials.  

A February newspaper report found the sewer district spent hundreds of millions of public dollars with little or no oversight at a time when residents' sewer rates have risen steadily.  

The Cincinnati Enquirer found MSD spent approximately $680 million in the decade following a November 2007 memo from a former city manager that the newspaper says eliminated a checks and balances system.

"I've had concerns about the oversight of MSD and instructed audit staff to expand our regular financial audits in recent years," Yost said in the February news release. "It is obviously time to take a deeper dive."

The audit will review MSD's competitive bidding process, contracts and payments.

According to the release, "a special audit is a defined-scope examination of financial records and other information designed to investigate allegations of fraud, theft or misappropriation of funds, or to quantify the extent of such losses."

A city audit released in June suggested Cincinnati officials needed to further investigate some of the past practices of the former management of the Metropolitan Sewer District.

It had 34 recommendations for changes.

The investigative team, established by current City Manager Harry Black, found several problems with MSD's past use of contractors and issues with procurement practices. It also uncovered a number of questions concerning MSD's former "Student Intern Academy" and the "Project Rebuild Workforce Collaboration Foundation."

Under an agreement that expires in May 2018, Hamilton County owns the sewer district and is responsible for its budget. The city manages it and owns the assets it brought to the deal in 1968.