Councilman calls for audit of redevelopment commission amid ‘lack of controls’

City spokesman says audit of Redevelopment Commission showed "no major concerns"

FORT WAYNE, Ind. (WANE) A Fort Wayne City Councilman has asked the state’s accounting board to perform an expanded audit of the city’s redevelopment commission after a city audit found an undocumented $1.8 million real estate deal and a $2.5 million pledge that was never detailed.

Jason Arp, a freshman Republican who represents Fort Wayne’s 4th District, wrote a letter to state Examiner Paul Joyce that claimed “a demonstrative lack of adherence to policies and procedures” exists in the Fort Wayne Redevelopment Commission. The letter, dated Monday, was released to the media by Arp on Tuesday.

“If the resources were there I believe that the internal audit would have expanded, however we have a pretty small internal audit team and that’s why I’m calling on the state board of accounts to pitch in and help out and make sure that the controls are there,” Arp said.

Jason Arp
Jason Arp

Arp claimed the city of Fort Wayne audited the commission, which revealed “substantial lack of controls” in the office. Among them: a $1.8 million real estate buy that was never recorded in the city’s asset management system despite a wire transfer for that amount.

“These things translate into potential losses to the city which could take away from your police force and your fire department,” Arp said. “Your tax dollars are fungible and if we’re not doing accounting one place it’s going to cost us somewhere else.”

Arp also took issue with a $2.5 million pledge by the commission to the $32 million Landing project that City Council repeatedly asked for details on. He said he has not seen the terms of which that money would be used for the project.

“My goal is that we would get some help making sure that the policies and procedures and the internal controls are there to make sure that the safety of taxpayers money is accounted for,” Arp said.

Arp is a member of the redevelopment commission’s board and said since he was appointed Jan. 3, the board has never met. It is scheduled to meet next week.

READ | Councilman Jason Arp’s Letter to SBOA

The redevelopment commission received $26.5 million in funding in 2016.

City spokesman John Perlich told NewsChannel 15 in a statement that the city’s audit of the redevelopment commission showed “no major concerns,” and added that the commission has “already identified and is implementing the needed adjustments to internal controls in order to improve processes and procedures.”

Perlich called the undocumented real estate deal “a procedural error” and said it has been corrected. He did not explain how. Perlich said the commission’s Landing pledge is pending because “the Redevelopment Commission has not, contrary to Councilman Arp’s statement, taken any official action with regard to the Commission’s participation in The Landing financing.” He added that the commission would address the issue with The Landing’s developers at an upcoming meeting.

2016 Redevelopment Audit Report

“We appreciate (Arp’s) interest in assuring that the City of Fort Wayne’s Redevelopment Department and Redevelopment Commission continue to have a significant role in facilitating the current and future economic investments that are being made in our thriving community,” Perlich said.

In his letter, Arp asked the State Board of Accounts to help develop policies and procedues along with internal controls to ensure the “soundness of the city of Fort Wayne during this period of growth and development.”

It’s not clear if the state will respond to Arp’s request.