"City auditing Fitchburg, Massachusetts airport"

Tuesday, November 23, 2004

Forensic audit up next for airport?
By Evan Lehmann
The Fitchburg (MA) Sentinel


FITCHBURG -- An even more intensive examination of the airport's finances
could begin this week, depending on the outcome of an audit being conducted
now, according to Mayor Dan H. Mylott.

"That's very possible," Mylott said Monday, referring to the possibility of
a forensic, or deeper-probing, audit. "If things are warranted, those would
be the areas we go to. I'm not speculating we're going to do that."

The current examination -- which Mylott called a "normal departmental audit"
-- was launched late last week, following a review of the airport that
raised questions about its financial operations. 

Forensic audits are more detailed than general audits, and often launched to
build legal cases, according to C. Richard Baker, professor of accounting at
UMass Dartmouth.

"Forensic audits in the more generic sense are designed to detect fraud,"
Baker said. "They're very often related to court cases... or civil cases." 

Airport Manager David L. Bouvier was placed on paid administrative leave
Thursday, and police confiscated boxes of documents from his office Friday
morning. The locks were changed to prevent him from re-entering the
facility.

Discussions of whether to launch a forensic audit occurred in City Hall
Monday, according to Pat Squillante, a partner with the private accounting
firm of Melanson & Heath, which she said found irregularities in the
airport's finances last week.

But no decision was made.

"The mayor, the other parties involved and (Melanson & Heath) will determine
what other procedures are going to be necessary," Squillante said. "Things
came up in a regular audit -- departmental review -- that are worth looking
at more closely."

Although Squillante is not a forensic auditor, she said her firm employs a
specialist and would be able to conduct the audit.

Mylott said he'll make an announcement about the airport on Wednesday,
though he did not allude to whether it would relate to a deeper-probing
examination.

Police detectives are involved with the examination, having attended a
meeting on Friday with Mylott, City Auditor Richard Sarasin, various
auditors with Melanson & Heath and Airport Commission Chairman Kit Walker.

"At this point, there is no criminal investigation going on," Mylott said.

Should a forensic audit be ordered, it would mark the third procedure
launched in the past two weeks. The first was the department review, which
uncovered the irregularities; the second is the current departmental audit.

In December 2002, a partial audit of the airport was conducted by Melanson &
Heath. It found shortcomings in the facility's accounting, including
concerns about the low frequency with which money was deposited, lapses in
payroll records and misidentified expenditures.

In a letter summarizing the 2002 findings, Melanson & Heath made a clear
distinction between the examination conducted, a partial general audit, and
its forensic counterpart.

"Because concealment and trickery are elements of fraud, no assurances can
be given that no fraud may have occurred..." the letter said.


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