With early voting already under way in Hamilton County, As the current chairman of the Audit Committee for the city of Chattanooga, I would call to the voters attention an item on the ballot that has received much less attention than the Republican Congressional race – or even the race for Assessor for Hamilton County for that matter.
Voters in the city of Chattanooga are being asked to approve an amendment to the City Charter that would call for an independent Audit Committee to oversee the work of the City’s Internal Auditor and the external audit process. Already, the city has moved to put these vital protections into place. Mayor Littlefield’s office moved to pull the Internal Audit department out of the city’s Finance department and make it reportable directly to the mayor soon after taking office, and in 2009, the City Council created by resolution an Audit Committee for the city.
I would commend both the mayor and the Council for these actions, but would also point out that while they did improve the objectivity and independence of the audit process, more could have been done. Indeed, reviewing minutes of the Council’s budget and finance committee meetings indicated that the suggestion of amending the charter was considered for a time, but tabled for later discussion.
Now, the current Audit Committee has drafted and approved legislation intended to further strengthen the independence of both the internal and the external auditors. This amendment was then reviewed and approved by the City Council for inclusion on the Aug. 2nd ballot. Public discussion has been minimal, but all five (uncompensated) members of the Audit Committee agree that this amendment is a positive step in protecting citizens of the city. This legislation mirrors what is being called for in Congress’ Sarbanes-Oxley act, calling for independent Audit Committees for all public companies, and is an appropriate step to take as our city continues to grow, both in population and in services provided by the city.
The city’s finance director has already indicated that there is no additional cost to the city by passage of this amendment – simply because both the Audit Committee and the Internal Audit department already exist, but without protection of political influence or termination by future mayors or City Council actions.
I strongly encourage you to support this change and vote for the amendment on Aug. 2nd.
David J. DiStefano, CPA, CMA
Chairman, Audit Committee for the city of Chattanooga
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The city of Chattanooga needs an audit director and audit department that is independent of politicians that are elected by its taxpayers. However, Ordinance 12566 is majorly flawed because its primary goal is to give Stan Sewell (current city of Chattanooga audit director) a “job for life.”
Stan Sewell is not Independent of the city of Chattanooga mayor’s office because he was appointed by current city of Chattanooga Mayor Ron Littlefield on May 24, 2005. This appointment is documented on Page 15 of the June 14, 2005 Chattanooga city council minutes. Sewell has even gone to extreme measures to ensure that Ordinance 12566 passes. Measures such as purchasing a dot com address for a pro Ordinance 12566 message and also mailing out postcards to city of Chattanooga residents urging people to vote for his Ordinance.
If the issues at the Moccasin Bend Wastewater Treatment Plant were so bad, it appears that Stan Sewell would have resigned from his city of Chattanooga position when the mayor did nothing to rectify the situation (after that audit was completed). However, Stan Sewell just stayed and retained his 90,000+/year salary while it appears that the city’s sewer system is broken almost beyond repair.
A truly independent auditor at the city of Chattanooga would never be appointed by an elected official (However, Littlefield appointed Sewell). A truly independent auditor would not be campaigning for his own job to be elected as the audit director (However, Sewell is campaigning heavily to retain his appointed job).
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I have more confidence in Stan Sewell as City Auditor than I have in the quality, condition, and availability of what he has to audit. His findings will be made public and that is a welcome improvement. He certainly provided immediate answers to my questions (via my Council representative) concerning the Auditor's and Audit Committee's relationship with the Council under the new setup.
As for the sewage treatment plant and related contributing systems, those problems were there long before Mayor Littlefield was elected...and probably before he headed up Public Works. Past mayors knowingly allowed the problems to continue to deteriorate until we could no longer slide by barely meeting water quality standards. That is where we are and that is what happens when problems are not solved when they first appear, especially when we have no control over changes in national water quality standards after 10-20 years as environmental conditions (and politics) dictate.
I have never personally met Mr. Sewell or the Mayor. I believe this setup will audit itself and will prevent disastrous expenditures for the taxpayers by flagging problems, making recommendations, and placing the responsibility for corrections on our elected officials. And the public will be alerted as it happens. It is not pleasant or encouraging to think about how much the city could have saved on correcting our wastewater problems and repairing the riverfront if we had taken action when the problems first surfaced. Our learning curve has just been tweaked and we shall not soon forget it.
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I have seen a lot of discussions concerning the New Audit Committee concept that is on the ballot in the City of Chattanooga. Many of the comments are very good and some just astound me at their ignorance. The concept is simple. The audit department is currently under the Mayor’s office. There is little independence in this scenario. The new proposal would create an independent committee to shield the audit department from the political pressures. This committee would be made up of independent, unpaid, members. These committee members would be selected from the leading financial organizations in the city; the Tennessee Society of CPAs, The Institute of Internal Auditors, and the Association of Certified Fraud Examiners. None of this these members will work for the city and thus not subject to the political pressures.
Now I am also frustrated with the numerous attacks on Stan Sewell. I have known Stan for several years and have found him to be a genuine dedicated professional and straight forward person. His reputation is not in question. I wish the Mayor Littlefield haters would quit attacking Stan just because he works for a city that is run by someone they detest. Mr. Sewell has funded much of the effort to create this independent audit committee personally and no Ms. Holmes, it is not just to keep his job. It is to allow he, and the other professionals in the audit department to do their jobs.
I really don’t understand the opposition to this measure. It establishes a truly independent committee to oversee the audit department functions; it cost no additional money, it removes the auditors from political pressures. Isn’t that what everyone has been looking for when it comes to the City of Chattanooga?
Vote for passage of the Amendment to the Chattanooga City Charter.
Anthony C. Sanders, CPA, CFE