Montcalm County investigation nears $400,000 in bills at 9-month mark


By Elisabeth Waldon • Last Updated 9:40 am on Tuesday, May 23, 2017

STANTON — Montcalm County is approaching $400,000 in legal costs as a financial investigation of this county hits the nine-month mark.

The Daily News submitted a Freedom Of Information Act (FOIA) request to learn how much county commissioners have approved paying in legal and accounting bills since the investigation got underway in August 2016.

As of the end of April, the county has paid a total of $393,007.02 — including $204,663.24 to Rehmann Robson (accounting services), $114,870.72 to Clark Hill (legal services) and $73,473.06 to Municipal Financial Consultants Inc. (MFCI), which is assisting Clark Hill with legal services.

These costs do not include a fourth firm — Amherst Consulting — hired by commissioners in April as accounting and auditing experts to assist Clark Hill in the ongoing investigation and potential legal claims against the county’s former auditing firm Abraham & Gaffney.

Commissioners authorized Clark Hill to investigate and pursue potential claims against Abraham & Gaffney this past January, including but not limited to “negligence and professional malpractice.”

The county parted ways with Abraham & Gaffney last year — after commissioners went nearly a full decade without physically hearing audit reports from the firm — and has since hired Gabridge & Co. as its new auditing firm.

The resolution approved by commissioners in January stated, “Whereas the county has discovered errors and irregularities with work performed by the former controller (Chris Hyzer) and potential mismanagement by the former auditor (Abraham & Gaffney) and seeks to retain and engage Clark Hill PLC to complete an investigation and pursue any claims as it relates to these errors and irregularities. The law firm of Clark Hill PLC shall be retained and engaged to complete an investigation and to make recommendations to the board related to the pursuit of legal claims and filing of a complaint as to the former auditor.”

Commissioners have met in closed session with Clark Hill attorney John Axe several times this year for updates about the ongoing investigation, but no information has been made public.

Hyzer, who previously worked as a senior auditor for Abraham & Gaffney, was hired as Montcalm County’s controller-administrator in 2007. He resigned from that job in April 2016 to take a job as the finance director-treasurer of the city of Ionia.

During Hyzer’s time at the helm of Montcalm County, county expenses overshot revenues by an average of $1.5 million per year since 2008.

In the aftermath, the ongoing legal costs are being paid out of the county’s previous delinquent tax revolving fund bond and a transfer of funds.

“I would remind you that overspending our general fund dollars was the original cause of the problem,” Montcalm County Controller-Administrator Bob Clingenpeel told The Daily News as part of his response to the FOIA request. “Bonding or transferring funds from the delinquent tax revolving fund is only a short-term solution to fixing the structural deficit.”

Clingenpeel and commissioners declined to comment on the ongoing investigation. However, Board of Commissioners Chairman Patrick Q. Carr said he feels positive thus far about the county’s current direction.

“My personal gut feeling is I feel better about where we’re at today than we were nine months ago,” Carr said. “I really feel good about the people who are in place, Bob particularly. I think he’s got the experience, demeanor, mindset and work ethic to help us through this process. That’s key … the personnel that he’s working with and the changes he’s making to the controller’s office, his relationship with the county treasurer and his willingness to work back and forth. Those things are huge and will prove in the end to be beneficial to our recovery process.”

 

Montcalm County Board of Commissioner meetings for May are scheduled as follows:

• Monday: Law Enforcement & Courts Committee at 9 a.m., Health & Human Services Committee at 9:30 a.m., Economic Development & Physical Resources Committee at 10 a.m. and Finance & Personnel Committee at 11 a.m.

• May 18: Solid Waste Management Committee at 3 p.m.

• May 22: Regular meeting of the full Montcalm County Board of Commissioners at 6 p.m.

All committee meetings are open to the public and will take place on the third floor of the Montcalm County Administrative Building in Stanton. Visit montcalm.us for more information.

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