Wednesday, December 3, 2003

Investigation of DAPC: Letters from police chief, GBI, explain decision

Special Press Release

Nov. 26, 2003

On Oct. 12, 2003, Mayor Steve Brown delivered a letter to Chief of Police James V. Murray asking for an independent law enforcement appraisal of the Development Authority of Peachtree City as it relates to its operation of the city tennis center and the Frederick Brown Jr. Amphitheater. Chief Murray reviewed all related documents provided to him by both the city and the Development Authority, and conducted interviews related to the entire operation of the venues and included the bidding, building and management function of the facilities. During this review, Chief Murray did not find any conclusive evidence that would suggest a crime had been committed from the materials he had examined.

On Nov. 10, 2003, Chief Murray contacted Mr. Vernon Keenan, director of the Georgia Bureau of Investigation, and requested the assistance of the GBI’s Financial Investigative Unit to review documents related to the operation of the venues. On Nov. 12, Chief Murray met with Special Agent Nancy L. Windom, Forensic Investigation Unit Manager, and Special Agent in Charge of the Financial Investigative Unit Steve Edwards. During the meeting, all documents that had been reviewed by Chief Murray were turned over to the GBI for their expert review and analysis.

On Nov. 24, 2003 Chief Murray again met with the GBI and was presented a letter dated Nov. 19, 2003 that stated “During this review, we found that the information provided was insufficient to allow a determination as to whether a crime has been committed.” In addition, they suggested that a “more specific review” be conducted based on the Development Authority audit for the year ending Sept. 30, 2002. They also recommended that four specific potentially problematic areas be addressed. The four areas listed were:

1. The accounts receivable records are not being maintained and recorded on the Authority’s general ledger.

2. A large number of accounts and retainage payables were not accrued by the Authority as of the end of the fiscal year.

3. Advanced payments should be recognized as deferred revenue until the period in which the revenue has been earned.

4. Recording of transactions to the city and from the city should be shown in separate accounts and not net transactions.

The GBI has also stated that in the event this audit uncovers any illegal activity, they are ready and available to assist in the investigation.

It is important to mention that during this review there were numerous suggestions that bad decision-making, failure to disclose conflicts of interest and failure to follow proper procedure were prevalent when the Development Authority and its members were conducting Authority business. The purpose of this review was to determine if a criminal offense occurred and was not intended to review any possible ethics infringements. In many cases, the failure to have a detailed operation plan specifically designed to hold accountable both employees and members of the Authority for the proper accountability when spending or obligating taxpayer dollars, has led to a cloud of supposition. Chief Murray will recommend to the city that the recommendations of the GBI be followed.

Letter from the GBI to Chief Murray

Dear Chief Murray,

Our staff has reviewed the documentation you provided to us Nov. 12, relating to the Development Authority of Peachtree City and the City of Peachtree City. During this review, we found that the information provided was insufficient to allow a conclusive determination as to whether a crime has been committed.

It is our suggestion that you recommend to the independent auditors that they closely review particular areas of concern, as based on the Development Authority of Peachtree City Audit Agenda for the year ending Sept. 20, 2002. A more specific review of available records and other documentation may allow a more conclusive determination to be made of whether any criminal acts have taken place. In particular, we would suggest further examination of the following potentially problematic areas:

1. The accounts receivable records are not being maintained and recorded on the Authority’s general ledger.

2. A large number of accounts and retainage payables were not accrued by the Authority as of the end of the fiscal year.

3. Advanced payments should be recognized as deferred revenue until the period in which the revenue has been earned.

4. Recording of transactions to the city and from the city should be shown in separate accounts and not net transactions.

Please know that we are available to assist you further with this matter, should additional audit findings indicate the possibility that criminal acts have occurred. We certainly enjoyed meeting you, and if you need further assistance from our office, please call us at 404-212-4050.

Signed,

Nancy L. Windom

Forensic Investigation Unit Manager

Financial Investigations Unit

Steve Edwards

Special Agent in Charge

Financial Investigations Unit