Township auditors fired over 2012 cost overruns

Independence Township severed relations with its auditing firm over billing irregularities stemming from its 2012 audit.
The Township Board of Trustees voted, Nov. 18, to deny a request by accounting firm UHY LLP of Farmington Hills for $20,000 in overage charges for the 2012 fiscal year audit. The 2012 audit was completed and presented to officials at an August 2013 meeting.
Trustees also voted to sever the relationship with the firm.
When the township first voted to enter a contract with UHY, overage costs had been expected, but were required to be approved before any fees were incurred, said township Supervisor Pat Kittle.
Each year, the township must follow state law, which mandates an audit be conducted on government entities. UHY’s request for payment was over 11 months after close of the year. The firm requested a payment for the overage charges weeks ago, Kittle said.
The township should have been notified of the charges much earlier, he said.
The supervisor said UHY offered to settle for less than $20,000, but he was not authorized to make such a payment.
After the audit was completed last summer, an executive summary detailing work performed was requested and received from UHY.
However, the summary did not detail additional work which would have resulted in overage charges, said Trustee Ron Ritchie.
Township Clerk Barb Pallotta said the township recently received a statement of charges broken down at an hourly rate. The bill was reviewed and summarized by the township’s finance director, and Pallotta recommended officials review the report.
Kittle said he found it rather disturbing the fees were just recently requested.
Before awarding the work to UHY, the Township Board opened it up to bids by other companies, said Trustee David Lohmeier.
UHY was chosen by the township to do the work in part to save money, but to also give the firm a chance, feeling they would do a good job, Lohmeier said.
Contracting with UHY saved township money, but the work was not up to caliber, he said.
Pallotta said ending the relationship with UHY was a tough decision, but audits they performed were very difficult due to a lack of communication between auditors and the township’s elected officials including herself, Kittle, and Treasurer Paul Brown.
In addition to denying payment and severing the relationship with UHY, the trustees also voted to have the Audit Advisory Committee review the issue and make their future audit recommendations by the Dec. 23 meeting.