Columbus – Auditor of State Dave Yost today issued about $779,000 in findings for recovery against the City of Cincinnati, Hamilton County and seven companies that did business with the Metropolitan Sewer District of Greater Cincinnati (MSD). 

The findings are part of a special audit of MSD performed by the Auditor’s Public Integrity Assurance Team, which uncovered undocumented work, misuse of government funds, padded expense reports and other violations that occurred from 2009 through 2015. 

“This audit confirms what many suspected – financial oversight and strong controls were lacking at Cincinnati’s sewer district,” Auditor Yost said. “Those at the helm showed little regard for ratepayers by passively signing off on excessive payments. Ratepayers are fortunate that more misspending didn’t occur given the lack of controls in place at MSD. They were asking for trouble.” 

As of Sept. 11, $182,476 of the $779,164 (23%) owed to MSD has been repaid, although more repayments are possible in the coming days. Former MSD Executive Director Tony Parrott is jointly liable for $461,594 of the unrecovered amount. Margie Anderson, former superintendent of wastewater administration, is jointly responsible for $87,999.

Auditors issued the heftiest finding for recovery against Urban Strategies & Solutions for $294,000. The company received the money from MSD to provide “tracking, monitoring, research, or consultation” services from January 2013 through May 2015, but no documentation existed to support the work or the resulting payments. MSD also continued to pay invoices from the company during a period when the work should have been suspended. 

Another company, Focus Solutions, owes $163,261 to MSD for excessive and improper billings from 2011. The audit identified 23 instances where time sheets for the company’s president, Zola Stewart, listed 24 hours or more of work performed in a day. Auditors identified improper payments totaling $74,373 for the misreported hours. 

Focus Solutions also billed MSD $75,888 for work that was not directly related to the district, but was instead for the nonprofit organization, Project Rebuild Workforce Collaboration Foundation Inc. In addition, MSD paid $92,546 to Ribway Engineering Group and $18,777 to the law firm Crabbe, Brown, & James for work that benefited the foundation.

Several more findings for recovery totaling $137,742 are against the City of Cincinnati for billings to MSD that were excessive or did not serve a proper public purpose. The city repaid the full amount after auditors notified officials of the charges. 

Other special audit findings include:

• RA Consultants used incorrect billing rates for its employees, causing MSD to overpay the company by $30,159.
• Ribway Engineering Group used the wrong billing rate for an employee, resulting in overpayments totaling $16,045 from MSD.
• Focus Solutions continued to invoice MSD and was paid $13,000 during a period when the company’s work should have been suspended. 
• MSD paid $12,000 to Ellington Management Services to review and enhance its rules and guidelines for the Small Business Enterprise program. However, the company’s final draft submitted to MSD had no significant changes and did not enhance its policies.  
• Hamilton County charged MSD $9,072 for expenses that were either paid twice, unallowable or lacked proper supporting documentation.
• No supporting documentation existed for $5,423 in travel expenses invoiced to MSD by Early Morning Software. The company also charged a duplicate $139 lodging expense, which MSD paid twice. 

Below is a summary of all findings for recovery and repayments listed in the report:

• Urban Strategies & Solutions: $294,000 
• Focus Solutions: $163,261 
• Ribway Engineering Group: $108,591 ($16,885 Repaid)  
• Greater Cincinnati Water Works: $82,366 (Fully Repaid)
• City of Cincinnati Planning Department: $48,536 (Fully Repaid)
• RA Consultants: $30,159 
• Crabbe, Brown, & James: $18,777 (Fully Repaid)
• Ellington Management Services: $12,000
• Hamilton County: $9,072 (Fully Repaid)
• City of Cincinnati Finance Department: $6,840 (Fully Repaid)
• Early Morning Software: $5,562

A full copy of the special audit report is available online.

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The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 6,000 state and local government agencies.  Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.

Contact:
Beth Gianforcaro
Press Secretary
614-644-1111