February 15, 2019
Dear Friends and Neighbors:
The TGM scandal seems to be growing in attention. In addition to the accurate articles below by the Cape Gazette, two other reporters have contacted me and are in the process of writing stories. Here is the summary which drew them in, with the links to the huge problems with the TGM AUPR which have only come forward in the past 10 days due to TJ and Scott’s refusal to disclose prior. Because of the information, there is a stronger argument than ever that TGM should be terminated now on the basis of serious impropriety and violating its own letters of agreements with the town. Read on:
The following is from “TGM Impropriety and Conflicts”
“ TGM missed the fact of huge deposits and assets obtained through the Military Surplus Program (1033 program) by the Dewey Beach Police in each of five audits dating back to 2013. Among other signs, TGM’s failure was despite the fact of a $35,000 deposit in the November 2016 Actual vs Budget Report under the Other Fines and Revenue as “Gain/Loss Sale of Equipment.” Despite the fact that TGM itself missed the 1033 program, TGM was inexplicably hired to review the procedures under the guise of an “Agreed Upon Procedures Review” which was to be supervised by the Town Council and the Audit Committee, not just Mayor Redefer, Larry Silver and Scott Koenig.
Despite the obvious conflict of being hired to evaluate their own mistake, TGM was hired by means of engagement letters to perform Phase One and Two of the AUPR, beginning in December 2017 and ending on August 3, 2018. The AUPR, by terms of the agreement, was required to be provided to Town Council and the Audit Committee. However, during both phases advance copies for editing were wrongfully provided by TGM to the Mayor Redefer, the Town Manager Koenig, and Audit Committee Chair Larry Silver for editing before the Council or Committee could see the report. The changes made by Redefer, Koenig and Silver have never been disclosed and for that reason invalidate the independence requirements which apply to the AUPR due to the signed the engagement letter, and standard accounting industry procedures. Both engagement letters were hidden from the public until obtained by DCA. The second engagement letter was hidden for eight months, until DCA obtained it in mid January 2019. “
We hope you all will join us in urging the Mayor and the Audit Committee to remove TGM now. TGM has audited the town for the standard length of five years, now a new independent auditor should be hired after a review process. The Dewey audit does not even begin until April 1. As the second article below indicates the Audit Committee is in the midst of a Request for Proposal to do just that, but the timing is everything. They were told by the Mayor and Town Manager last Friday that it was too late to hire a new auditor for this year. That is false. Past behavior is the best predictor of future performance, and TGM wrongfully providing the Mayor and Town Manager advance copies of the AUPR for editing, combined with the huge over-billing means the time has come now to separate from TGM. As auditors they would have no credibility with responsible residents, the press and fellow accounting professionals in moving forward on auditing the town, The only question is how much of the AUPR overcharges should be paid back. More on that shortly.
Stay tuned, even in the winter, dull moments with the town government are rare in the Town of Dewey Beach.
Jeffrey C. Smith
Dewey Citizens for Accountability
PS There are also some news articles you may not have seen, which are on DCA’s home page DeweyCitizens.org, the latest at the top.
And… the recent Audit Committee Meeting, taped by DCA, because the mayor refused to use the existing town audio video system to tape is posted here