Dumping out the notebook: Internal Auditor talks

Have a few things to put out here – a document or two, and some audio recording of yesterday’s audit committee discussion as well – regarding the ongoing issue around the Knox County internal auditor office.

Generally, and quickly, the story goes like this:

– Audit Committee chairman Joe Carcello met with some members of the audit committee before the July 9 meetings – in announced get-togethers – to talk about Richard Walls’ employment with Knox County.

– Most of those committee members – three commissioners, a majority – appeared to be on board with terminating or parting ways with Walls.

– Mary Kiser was not part of those discussions, so she was taken by surprise when Walls employment came up in the meeting. The vote to recommend firing Walls was 4-1

– Commissioner Mike Brown also isn’t cool with letting Walls go, and said as much in audit committee the meeting Tuesday. Listen to the exchange here (and if you haven’t do so – it’s pretty heated stuff).

Commissioner Amy Broyles forwarded over this 8-14-13 report, which she said were the bullet points that Carcello worked from on the recommendation to terminate Walls. Of note, Winston Churchill and Phillip Fulmer both are mentioned in an analogy relating to success, then being time for a change. Some of the points raised (these are Carcello’s words, but the emphasis has been added):

  • The last two County finance directors have been John Troyer and Chris Caldwell.  Both of these individuals have expressed concerns about the internal audit function – including the quantity of its work, the areas where audits have been performed, unreconciled differences between audit findings and auditee responses and, at times, aggressive interactions between internal audit and auditees.  Our last two external auditors have been KPMG and Pugh & Co.  The respective engagement partners have been Jack Reagan and Larry Elmore.  Both have communicated to me serious concerns with the County’s internal audit function.

Carcello then goes on to detail points by external auditors about the offices quality and quantity of work.

Some are already looking past to what the new audit office could look like. In a phone conversation Tuesday, he said that the next auditor could be someone such as an executive audit team member from, say, Nashville or Memphis or some place like that who would like to come in and set up shop here. Ideally, he’d like to see the county use an external auditor. He said:

 I didn’t get the sense that there’s broad support for that on the audit committee … I dont’ think we’ll go in that direction. I think we’ll do – it’s a little bit of speculation – my belief is, assuming Commission acts on our recommendation, we would look for someone to come in and inherit the function internally, like Richard has done. I don’t have any names in mind.

Carcello added that there has been no behind-the-scenes political wrangling going on, and how he’s handled the process (and spoke in the 3rd person):

If you think about it logically for a second, and Carcello is a volunteer, chairing this committee takes a lot of time, he’s not paid a penny, and obviously we have to do these things publicly, which is uncomfortable, unless you have no basic empathy or hate the person … I don’t want to make this kind of recommendation in a public setting, it is extremely uncomfortable and unsettling.

Meanwhile, Mary Kiser – who has officially stepped down (h/t Donila) – had her say about the situation, which we ran also, but she also detailed her connection to Walls. Both are members of the same professional organization. And while she’s not cool with how things happened, she stops short of accusing anyone of backdoor dealing:

The only tie I have is that, since he’s an internal auditor, and I am too, there is the local chapter of internal auditors, and that’s the only tie that we have. I like to keep myself above any controversy, and want everything to be above-board, and I don’t know that it would proper and have never discussed anything with the audit committee when I see him occasionally …

I wouldn’t want to be involved in anything of trying to conspire. That’s not me … I do not want to guess how everyone else was informed. I don’t want to guess why the purpose of the meeting was not clearly stated. I do know that Richard Walls has not been treated fairly.

About Gerald

A reporter in Knoxville, TN. Work (mostly) inside and play (mostly) outside. I'm a part of the X or the Y generation. None of us claim the other.
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One Response to Dumping out the notebook: Internal Auditor talks

  1. Pingback: Dumping Out The Notebook: signs, fireworks and seniors at commission | Knox beat

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