Alderwoman Sarah Widomski made the motion about the audit.
DERBY — The city’s Board of Aldermen & Alderwomen voted unanimously on Thursday to search for a firm to conduct a ‘forensic audit’ of city finances.
The audit will cover Dec. 1, 2017 to Dec. 31, 2023, according to a motion put forth by Aldermanic President Sarah Widomski.
At the meeting Widomski, a Democrat who was just re-elected, said her motion authorizes the Derby Town/City Clerk to publish (on behalf of the Alders) a “request for proposals:” that is, a formal request asking firms to submit proposals outlining their experience, how they would proceed with the audit, and how much it would cost.
There was no discussion of the matter prior to the vote. The time period covers Dziekan’s three terms as Derby mayor.
A forensic audit was a campaign promise made by Derby Mayor-Elect Joseph DiMartino when he announced his candidacy in January.
DiMartino, a Democrat, was elected on Nov. 7, beating out incumbent Mayor Rich Dziekan, Alderman Gino DiGiovanni Jr. and Sharlene McEvoy in a four-way race for mayor. DiMartino will take office in December.
A few days after DiMartino announced his candidacy, Mayor Dziekan wrote a letter to the editor asking for an apology, specifically citing the call for a forensic audit.
In his letter, Dziekan said a forensic audit is a tool used to investigate potential criminal activity, such as fraud or theft.
No one has alleged criminality in the Derby finance office, Dziekan wrote.
“It is sad that someone who desires to serve in the highest elective office in the city begins his campaign by calling into question the professional reputation of others, without a shred of evidence or merit,” Dziekan wrote in the letter.
The Valley Indy sent an email to Dziekan on Monday seeking comment.
Widomski did not answer a question about whether fraud is suspected in Derby. Instead, she said there are questions from elected officials as to whether they have a full understanding of Derby’s finances.
“The BOA/A voted to put out an RFP for a forensic audit because members of our board, other boards, and the community are not confident that anyone has a complete picture of the city’s financial status,” Widomski said in an email.
The quest for a forensic audit is the latest chapter of a seemingly endless tale involving Derby’s financial practices, policies and bookkeeping.
Mayor Dziekan has said repeatedly that when he took office in 2017 his administration discovered budget mistakes that left a deficit in the city’s fund balance.
Dziekan himself called for a forensic audit while running for re-election in 2019, according to a letter to the editor from his campaign manager at the time.
Dziekan blamed the prior administration, adopted a “recovery plan” meant to straighten the ship, and worked to hire an experienced finance director.
The administration, working with a bi-partisan hiring committee, hired a new finance director in July 2021 — only to put her on administrative leave less than a year later in order to conduct an investigation into her job performance.
The Dziekan administration wanted to fire her, a move that was blocked by the majority of the Derby Board of Aldermen & Alderwomen, whose members said an investigation conducted by an outside firm didn’t show wrongdoing.
The independent report found that the finance director had violated city procedures when it came to issues such as purchasing camera equipment for the police department. But the report also found Derby government lacked specific written policies and procedures, and that the finance director’s actions were reasonable given the circumstances.
The finance director was reinstated in June 2022, only to resign in August 2022.
In September 2020, Derby — due to the prior budget blunders and the fact the city was constantly late submitting financial audits to the state — started meeting voluntarily with the state’s Municipal Finance Advisory Council (MFAC). The group of municipal finance experts would ask for progress reports on how Derby was fixing issues found in previous Derby audits, some of which went back years.
In August 2023, the members of MFAC, citing a lack of progress, voted to declare Derby a “tier one” community, which made the MFAC meetings mandatory rather than voluntary.
The ‘tier 1’ vote came with the following general requirements (which will fall to the DiMartino administration once it is in office):
1. Derby’s ‘chief executive officer’ (the mayor) “must appear before the Municipal Finance Advisory Commission (MFAC) to discuss the municipality’s financial condition and the implementation of measures to improve the municipality’s financial condition.”
2. Derby must “prepare and present a five-year financial plan to the MFAC for its review and approval.”
3. Derby must “provide written information to the Commission as requested.”
4. Derby must “implement remedial measures to correct unsound or irregular financial practices and to improve the municipality’s fiscal condition as identified by the MFAC.”
In a letter from MFAC Chairwoman Kathleen Clarke Buch to Mayor Rich Dziekan dated Sept. 6, the lack of adequate progress in Derby was described as follows:
* The city’s June 30, 2022 audit report, issued in June 2023, showed the city used $1.9 in fund balance to deal with an operating deficit – while previously projecting a $1.1 million operating surplus.
Widomski said that the state commission — like some elected officials in Derby — didn’t have complete trust in the data the administration supplied to the sate.
“MFAC noted at their August meeting that they question the reliability of the reports they have been receiving from the city. We intend to show the state that we are serious about getting our financial house in order by bringing in someone to take a deeper look at the finances of the city,” Widomski said.
Meanwhile, the city has been without a finance director for just under 15 months.
The finance director position is one of political acrimony dating back years. There were six finance directors between 2012 and 2022, a turnover rate that MFAC members have expressed concern about.
