|SFD board makes right ethical choice killing audit bids|
|Written by Trista Steers MacVittie|
|Friday, 25 March 2011 00:00|
The Sedona Fire District Governing Board decided to go a different direction with its newly formed audit committee after bids came in, which may have had something to do with it.
The wife of the audit committee’s chairman, Joe Demme, works for one of three firms that put in a bid for the contract with SFD.
When the Governing Board opened sealed envelopes from the audit committee members, the anonymous votes indicated each of them selected SM McGladrey, the firm Demme’s wife works for. Demme did not vote.
The bid from SM McGladrey was for $168,910 while the bids from the other two firms were $65,000 and $62,000. SM McGladrey’s bid was also late.
We found out Demme’s wife worked for an auditing firm from him. He mentioned it at one of the first audit committee meetings before the bids came. Demme later said his wife wouldn’t be directly involved with the audit.
We sat on the information, thinking committee members would see the blatant conflict of interest for the firm to even bid.
However, when the proposals came in, one of which was from SM McGladrey, it was clear to us the ethics violation wasn’t clear to them.
If Demme thought his wife’s firm was the best for the job, he should have resigned from his position as chairman and left the committee altogether.
Then, the firm would have stood on its own merits, even with a price tag of more than double the others.
After sitting on the information Demme gave us at the beginning of the process, we broke the story before the Governing Board planned to vote on it so residents would be aware of all the facts before the meeting. We assumed if Demme announced the information at an audit committee meeting, then the board itself was already aware.
At the next meeting, no action was taken.
On Wednesday, March 23, the board announced — after revealing who the audit committee selected — it would be going in a different direction with the audit and audit committee altogether.
The board made the right ethical decision by not following the committee’s recommendations and hiring a firm that presented an obvious conflict of interest.
Whether the decision would have been made if the story hadn’t appeared on the front page of the Sedona Red Rock News will never be known. However, the board should be commended for not going down that road regardless of what steered it in the right direction.
As far as the new audit committee is concerned, Demme should recuse himself from serving on the committee if he believes his wife’s firm will be bidding.
The committee, staff and firms that bid wasted time and energy only for the project to be killed. This time, let’s follow all the rules and save everybody a little time and money.