Budget Finance Audit Committee meeting for May 13th to order.

With that, Madam Clerk, would you please call the role?

Councilmember Denzel Anton McCampbell.

Present.

Councilmember Letitia Johnson.

President.

Councilmember Mary Waters.

Mr.

Chair, you have a quorum.

Thank you, Madam Clerk.

That'll move us along in the agenda to approval the minutes.

Members should have received a minutes and with that is their motion to approve.

Motion.

There's been a motion to approve the minutes and no objections.

The action shall be taken.

That'll move us on to public comment.

For folks that are joining us for public comment, we'll cut off the request for public comment at 10.

If you are joining us via Zoom, please use the raised hand function.

Seeing no one here in person for public comment.

Currently, we'll move over virtually.

Thank you.

Good afternoon.

Good afternoon, Ms.

Varner.

You speakers will have two minutes.

Good afternoon to all within the sound of my voice.

I'm Betty A.

Barner, president of the Soda Elsewhere Block Association here this afternoon to advocate for my community.

We are still in need of monies for our Finkel Corridor.

We are excited because there are new businesses that have opened with a new business that has opened, and there is a husband and wife team that lives in that community that has purchased a building that has been vacant for uh 30 to 40 years.

And they are renovating this building to have a home health uh care agency.

And that is wonderful for our community, and that will be located at Finco and Monica.

There is a brother team, the Dabish Brothers, I call them.

Uh they are uh in the process of wanting to open up a mini market at Finkel and Wyoming, where the McDonald's used to uh was located.

And they are will be coming uh to the council to go through that process and to get their approval.

I'm hoping the council will support uh this uh business opening up in our community.

We are a um food desert.

We don't have a supermarket in our immediate area, and their business is going to be a mini market and uh six gas pumps, but the most important thing they will have fresh produce, dairy.

There will be a deli that will have a cold and hot foods.

It is needed in our community.

So please support, and we need monies for that land use hearing fee.

Thank you.

Thank you, Miss Varner.

Next speaker, please.

The next caller is Nini's friend.

Mr.

Crawley, good afternoon.

Uh, you have two minutes.

Mr.

Crawley, Nini's friend, you have two minutes.

Are you there?

We can come back to the Mr.

Chair.

The next caller is Cunningham.

Brother Cunningham, good afternoon.

You have two minutes.

Brother Cunningham, are you there?

All right, we'll come back to Brother Cunningham.

Next speaker.

The next caller is William M.

Davis.

Commissioner Gate Davis, good afternoon.

You have two minutes.

Uh good afternoon.

Can I be heard?

Yes, you can.

Have there been any uh further action on requiring city vehicles to stay in the city and not go to um residencies outside the city of Detroit for employees?

There should be.

You may cannot, even though I think technically you can't require people to live in the city to work for the city unless they actually are at will appointed people.

But other than that, you can't do that.

Um, but we should require our prompt our our city vehicles to stay in the city.

We save on gas insurance and wear and tear on the vehicles.

Also, maybe we could do like some of the other communities around uh Metro Detroit.

They have uh police vehicles, there are states and areas to discourage people from speaking and doing questionable stuff.

Uh also I was curious as to you know, at times when the city gets large amount of money, like take the opera funds and other funds they receive.

What happens to the interest generated on those?

I don't I do not remember hearing any type of reports on that.

Other than that, you know, I look forward to uh a greater audit of what's going on with the city because uh I think whenever you have a change of administration, it should be a complete audit of everything that happened in the previous administration.

And I I don't think the city of Detroit residents should be paying for the cost associated with the dirty dirt.

I think that should be put on the previous chief executive of the city.

Uh thank you.

Thank you, Mr.

Davis.

Next speaker.

The next caller is legendary Detroiter.

Legendary Detroiter, good afternoon.

You have two minutes.

This is also Mr.

Crawler, so we can't.

Sorry, guys.

You have two minutes, sir.

This is Black Bag.

Nini Spring.

And um Detroit ledger.

Now, Mr.

McKinney, you head up this uh budget audit and finance committee for the Detroit City Council.

Well, there's a lot of issues that got to do with money, but I'm not going to talk about none of them today.

We'll say that for later.

You also the district seven representative for the city of Detroit.

City Council, City of Detroit, and Janice is busted, and it's Daniel Baxter.

It's busted, busted.

Now you need to call Gina Avery Walker, director of the Detroit Department of Elections in to your committee to find out about the finances over there at the Detroit Department of Elections, because Mary Elaine Beckman's ballot was counted in that 2024 February 27th presidential primary election.

So I know they use some money to do that, but Mary Elaine Beckman never got a ballot.

The ballot was sent to 12842 Sussex Street, and it was flagged as undeliverable by the United States Postal Service.

And Donald Trump was cheated on election Republican president for the United States of America by the Detroit Department of Elections, Gina Avery Walker under her direction.

And she's been overseen and oversaw by Janice Winfrey ever since she got there.

And Janice is a cheater.

Election fraud, voter fraud, absentee valley fraud.

Next speaker.

The next caller is Owner Papa.

Ms.

Hughes, good afternoon.

You have two minutes.

Good afternoon, and through the chairman, I'd be heard.

Yes, you may.

Thank you.

5.4 is a risk management quarterly report that seems to be um hidden.

I'm not sure why you guys keep saying transparency, transparency, and we can't see the risk management quarterly report.

It's a privileged document and confidential.

Why is it privileged and confidential?

Um 5.3 is an audit of the Detroit Employment Solutions Corporation.

I have been asking that since they started getting all of all of those ARPA funds that uh we don't know where they went.

We don't know where the training went.

And um, there's no date on this on this memo.

Uh all memos should have a date.

Uh we have lots of questions that have been brought back about the the um budget.

But can can we can we spend the uncumbered ARPA funds just on the youth and the senior citizens?

Can we at least do that?

I don't I don't want to spend another penny on blight funding because what what what blight funding has done is created more blight in our communities.

So please let's just focus on uh moving forward.

Um supporting our children and our and our seniors who are the legacy generally, the legacy residents in this city who deserve to be um acknowledged, especially with the ARPA funds.

Um so as we move forward, can we move forward in a positive direction for the people who actually should matter in this city, and that's the uh seniors and the and the and the youth instead of concentrating on bringing people to the city?

I think we should use our funds to take care of the people who are already here.

I hear that narrative all the time about people coming to the city and the fire department as we move the paramedics funds without a feasibility study to uh rates that seem to be unsustainable.

Thank you.

Thank you, Ms.

Hughes.

Next speaker.

The last caller going back to Cunningham.

Brother Cunningham, good afternoon.

You have two minutes.

I am driving county right now.

I have a customer in the back.

Uh 313 4449114.

3134914.

31344 9114.

That number was made so you can remember it.

So they hit the old chief.

I don't see a clock, by the way.

Uh the old chief um of D D dot.

I came down with Miss Dessa to the transit center, and she paid for some bus tickets for me to give out to the community.

I get a call from the chief of D dot.

Um Jenny Whitfield, and she cusses me out and goes off.

I stay calm and stay kind.

But when I went home, I called their name into the atmosphere and prayed in the Holy Spirit.

And less than two months or three months later, she was fired for another reason.

The Bible says to touch that God's anointed, neither do the servants any harm.

I want to let you know that I'm God's child.

If you're in trapping, if you're disrespecting, if you're harming in any way, I'm God's child.

And I'll say it again.

Touch not God's anointed, neither do the servants cunning him no harm.

Here on my shandel, I'm a son that my son yellow my show.

Here I'm my son, you're my shunda son that I'm shandy.

Thank you, Brother Cunningham.

Madam Clerk, would you please note that we've been joined by Member Waters?

Thank you.

Uh that'll bring us to the end of public comment.

Um, just a few things.

Um, Commissioner Davis, you brought up the uh concerns around fleet management and such.

I believe that was a conversation during the budget hearings.

Um I know the administration said that they are currently going through taking a look at the fleet and all those processes.

I believe that question was brought up by member Calloway.

Um also um there are other concerns brought up around various uh uh agenda items, including the audit and ARPA funding, so we will um get to that as we move along in the agenda.

Any other thing from colleagues?

All right, that'll take us on to uh unfinished business 5.1.

Um from my office, a memo requesting a resolution on Cinder Bill 559, 560 and 561.

Um I still need time on this, just on to see about the liberations that are going on in Lansing.

Um, so if we could bring this back in four weeks, if there's a motion.

You know, objections, the action shall be taken.

And I saw Mr.

Corley come on the screen.

Just want to double check.

Mr.

Crowley, did you have something for us?

Well, um uh Mr.

Chair, City Council members.

Uh I just wanted to remind the council that LPD did produce a report of a resolution on your behalf on this issue.

Um the resolution was dated, I think March 23rd.

So just to remind the council about that.

Thank you.

Thank you, Mr.

Corley, and thank you for the work on this.

Absolutely.

Um just trying to make sure we line up with the time and that it'll be impactful with uh what's going on, Lancer.

But thank you for sure.

Um that'll move us on to 5.2.

This is from member Santiago Romero.

Uh memo relative to the participatory budget expansion.

Um, if we have Ms.

Sullivan or Mr.

Washington on is there a motion to discuss 5.2 motion.

It's been a motion to discuss.

Have someone from the administration on Miss Sullivan is a panelist.

There she is, Councilman.

Thank you.

Good afternoon, Miss Sullivan.

Just wanted to uh check on the status of 5.2.

Um, I believe 5.2 was directed to LPD.

I think it was the OCFO's office.

Okay.

We can follow up with the OCFO and make sure that they can provide a response.

Can we bring it back in one week?

Is there a motion to bring back 5.2 in one week?

Motion.

It's been a motion to bring back 5.2 in one week.

See no objections to action shall be taken.

Thank you, Ms.

Sullivan.

That will bring us to 5.3 from Member Waters.

Uh uh memo relative to the request for an audit on Detroit Employment Solutions Corporation funding.

Um, is there a motion to discuss?

Motion Thank you.

Uh and I'll defer to you, Member Wars.

Well, we do have the AG here if you would like to discuss this.

Oh well, why not I just wait until we hear from her?

Uh Madam AG, if you want to come forward.

Because I think one was previously done.

Good afternoon.

Good afternoon, honorable city council members.

I'm Laura Goodsby, the Auditor General for the Office of the Auditor General.

You may proceed.

Good afternoon.

So I did submit a memorandum to uh councilmember waters through the city council president James Tate, dated May 1st.

And I wanted to do uh two things.

First, I wanted to acknowledge that we did receive the request for the audit.

You requested us to conduct a thorough audit of the Detroit Employment Solutions Corporation and the Detroit Works Program over the past five years.

As a part of this audit, you requested us to identify money that was previously allocated in the fiscal year 26 budget to fund apprenticeships programs, and how that money was one was reduced from one million dollars in the closing resolution for the budget to 250,000, and two, how that money was somehow spent without creating a single apprenticeship.

So first I needed to note that our staff, my office, we do not currently have the adequate resources to perform this audit soon.

However, I will include it in our upcoming annual risk-based audit plans as a special request from City Council.

In the interim, I wanted to just bring your attention through the chair to council member waters, that we did perform an audit of the Department of Civil Rights Inclusion and Opportunity, uh, better known as CREO, compliance fee dollars, and how those dollars were utilized by the DESC in September of 2018.

This audit was performed at the request of the former Detroit City Council President Brenda Jones.

We published three audit reports, which um are available to the public on our website.

And uh the first report was about the CREO and the compliance fee dollars, their financial operations that was published in January of 2021.

The second report was CREEL compliance fee dollars, but it's specifically related to Detroit Economic Solutions Corporations or DESC, their use of the compliance fee dollars, and that was published May 2021, 21.

And then the third report was focused on the compliance fee dollars and operations within CREEL.

That was an amended report was published in 2023.

But so based on the nature of re your request, I believe that some of those answers we precluded in the second report uh specifically relating to DESC's use of the compliance fee dollars.

And the main thing I want to point out is that we uh though we initially had a finding about uh our concerns with how they use those dollars.

As you may be aware, the compliance fee dollars uh were intended to increase the training for Detroiters uh for the skilled trades programs, specifically as it relates to those construction prior three million dollars.

So we did have some concerns based on the results of uh opinions from both the law department and LPD, and based on our the broad availability uh for DESC to use those funds, they had described that those funds are kind of blended together with many other federal funds and that although we thought we had uh restrictions on how they could use those funds when in fact DESC has a broad uh discretion over how they use those funds, and so uh I provided you with those reports.

I would say through the chair to you, Councilmember Waters one of the most uh expedient avenues that you can take is to request some additional information from DESC with respect to your request.

Okay, okay.

All right, thank you.

Thank you, Madam AG, uh member waters.

Um, you know, I had um received some information from some people that were concerned about the um how the dollars were previously spent.

So um that's what prompted my request.

Okay.

And I believe that you've outlined some of those.

And through the chair, how um as it relates to that specific executive order and the way it's written, it is very broad.

So perhaps the city council members may want to look at um how that ordinance is written and uh if it wants to be able to specify how an organization uses the city dollars that are provided to them.

Huh.

Thank you.

You're welcome.

Thank you.

Thank you, Member Waters.

All right, then thank you, Mr.

Chair.

No problem.

Anything else from just motion to receive and file this.

There's been a motion to receive and file.

Um this is five point.

Let me make sure I had the number right.

This is 5.3.

There's been a motion to receive and file 5.3.

Seeing no objections, that action shall be taken.

And Madam A.

G.

Since you are at the table, I know we have another line item with you.

So if it is okay with my colleagues, if we can move uh to bring up 5.12.

Motion.

It's my motion to um 5.12 is their motion to discuss.

Motion.

There's been a motion to discuss 5.12, and I'll read it from the Office of Auditor General and audit of the Detroit Health Department Food Safety Operations, an early communication of audit observations.

Oh, yeah, if folks can come forward, please.

Thank you.

Yeah.

Uh good afternoon.

My name is Kevin Asadi, uh, chief auditor with the Office of the Auditor General.

Good afternoon.

And again, Laura Goodspeed, Auditor General, Office of the Auditor General.

Good afternoon, and I believe you all have slides.

Yes, we do.

Can we give some more?

All right.

Thank you.

Again, Laura Goodspeed, Auditor General, Office of the Auditor General, and we're here to present today or discuss an audit of the Detroit Health Department, food safety operations, an early communication of our audit observations.

And thank you to this committee for allowing us to discuss this most important matter.

This communication, early communication, is a little different than the reports that have come before you.

With that, I would like to turn it over to Kevin Nassadi.

Thank you.

And our next slide typically is part of our audit.

We set our audit objectives.

So you'll note here the objectives for the health department food safety audit was to determine the efficiency and effectiveness of food safety programs and core operations.

We also looked at the adequacy of food safety programs and internal controls over major reporting processes, looking at any control weaknesses.

And then lastly, we're also looking at the status of prior to the findings for noncompliance in any prior audit report.

The next slide, just a little background on the Detroit Health Department, the mission statement.

So they are responsible to address public and population health priorities for Detroiters.

They are to ensure that essential local public health services are provided within the city to improve overall health outcomes for citizens.

Also to build the capacity infrastructure by establishing initiatives in unaddressed priority areas, addressing city health data and policy analyst needs, and also supporting sustained departmental growth in the best interest of the public's health.

So with that, we will get into the observations that were noted in this early communication.

At a high level summary, we noted in this early communication we detailed 11 observations related to cash handling concerns at the health department food safety division.

And the next slides we'll go through each of those observations that were noted.

Observation one was check money orders are not adequately safeguarded on October 7th.

I'm sorry, April 7th, 2026.

We observed 10 unprocessed checks totaling $7,064 in an unlocked file cabinet.

Observation two.

A non-compliant instrument was accepted, deposited, and subsequently returned for insufficient funds.

Deposited, and subsequently returned for sufficient funds.

Just for background on a counter check, we noted that is like a plain check, essentially a temporary check that is requested from an accounts bank holder.

Observation four, uh checks money orders are not deposited timely.

We observed several checks dated one to two weeks prior to the data deposit.

There is no way to determine when those checks were deposited, I'm sorry, received as they are not date stamped, uh, they do not maintain a mail receipt, and they are not electronically scanned upon receipt.

Observation five, uh deposits were made to bank branches outside of the city of Detroit.

Uh, according to the staff electronic scanner used at the health department was not operable since October 2025.

Uh the staff would physically deposit checks to Huntington branches located in Canton, Westland, and other Metro Detroit uh Michigan locations.

Uh should be noted that the treasurer has approved the designation of managers and supervisors to deposit outside the city.

However, the money was not being transported in sealed money bags during transit.

Observation six, uh checks were not made payable to the appropriate entity.

Uh we observed that not all checks are made payable to the city of Detroit Treasurer.

Observation seven.

Uh electronically deposited checks, money orders were stored in an unlocked cabinet and retained beyond the required retention period.

Uh, in an unsecured cabinet, we found several electronically deposited checks uh that dated back to 2024.

Uh for uh criteria requirements, according to the Treasury Department, uh checks should be retained for six months to one year and then shredded.

Um, as noted, the process checks were stored in an unlocked file cabinet with a bank account and other personal information that is easily accessible.

Observation eight.

The 2018 CFO directive for cash handling is out of date.

On April 14th, 2026, the OCFO held a cash handling training with the Food Safety Division personnel.

During that training, the Treasury representative indicated that the cash handling directive is out of date and that a representative will send an updated policy.

Observation 9.

Food safety operations does not use the available cash room.

The health department has a cash room on the first floor.

However, we observe that the cash room is not in use.

The cash room has a smart safe along with a computer and a printer.

Outside the room is a health department drop box with hours operation posted.

During the training, the Treasury recommended use of the cash room on the first floor of the building.

However, we noted that as of April 30th, we observed that the cash room was still not in use.

Observation 10.

The city cannot provide view read-only access to the operations software systems.

So as part of the nature of our work, our office has unrestricted access to all sources of information as prescribed by the city's charter.

As part of this audit, our office requested was able to obtain a view-only access to the SWORT solution system, which is utilized by the Health Department.

We did elevate this critical request to the IT department.

And as of today, we are in the process actually of obtaining that view-only access.

So, observation 11.

There is a lack of segregations of duties.

We observed that all administrative staff can accept in-person payments by credit card check or money order, and one or more of the same administrative administrative staff members can complete the following actions.

They can maintain custody of unprocessed checks, which were an unlocked cabinet.

They can issue food service licenses to establishment owners who make in-person payments for these food license renewals.

They can upload process payments in the source lesson system, and they can complete monthly deposit reconciliation reports.

Based on those observations, we noted uh the effects and the recommendations, which I'll go into next.

And so from the effect of these observations that we noted will detail it can result in delayed deposits.

These can increase the risk of late recognition of food safety revenue.

It reduces accountability for payments.

It can increase the risk of uncollectible revenue loss or misplacement of receipts prior to deposit.

Also, delays in depositing funds may result in a loss of interest income or investment earnings.

Due to ineffective segregations of duties with these payments processing outside of the OCFO, this can result in decentralized cash handling activities.

This increases the risk of errors or irregularities in the collection, recording, and reconciliation of inspection and licensing fees, which would potentially impact the accuracy and integrity of program revenue records and resulting in improper delayed or unauthorized issuance of food establishment licenses.

Continue on with the effects.

Also, processing these deposits outside a designated city bank branch.

Limits centralized oversight over licensing and inspection fee revenues, which can result in processing delays, reduced transparency, and weakened control over funds.

Also, going outside of the bank branch can result in an increased exposure to travel-related safety risks for city staff.

Financial instruments that are not properly endorsed upon receipt increase the risk that food safety payments cannot be processed or deposited or may not be negotiated by unauthorized parties and could delay in the result delay in the recording of licensing inspection fee revenue.

Continued on in the effect.

Financial instruments that are not made payable to the appropriate entity increases the risk that payments could be redirected, altered, or otherwise processed outside of city established city channels, resulting in potential loss of revenue or inaccurate recording of food safety funds.

Also, noncompliance with the acceptance for plan review fees increases the risk that the plan review activities may be performed without confirmed receipt of payment, resulting in uncompensated services and reduced cost recovery for the division.

And then lastly, for the effect, not utilizing the cash room for safety transactions weakens physical safeguards over inspection and licensing payment, increasing the risk of improper handling or loss of funds.

Moving on to our recommendations.

With significant weaknesses in the internal controls, the likelihood of cash misappropriation is high, creating a more than remote to probable chance that fraud or theft will occur undetected.

Key controls needed to mitigate this include restricting access to cash, implementing segregations of duties, and to conducting regular and sufficient independent reconciliations.

And that is the conclusion of our observations, effects, and recommendations.

And I think you and I will turn over to Laura Goodspeed Chair.

And just a final word.

Excuse me, as well as the OCFO prior to public publishing this memorandum.

We walk through it in detail.

And as Kevin noted, we have had some action from the uh IT department, where we now do have that critical read-only access into the systems.

Excuse me.

Thank you.

Thank you all so much.

Before we go into questions, I do believe we have Director Abazid on from the health department.

And do we have someone from the OCFO on?

Through the Chair, we have Christina Floyd, Ali Abazi, Scott Withington, and Regina Greer on from OCFO.

All right.

Thank you, Ms.

Sullivan.

If folks can come on the screen and introduce yourself for the record.

Good afternoon, uh council.

Good afternoon, Chair McCampbell.

My name is Ali Abzid, and I'm the Chief Public Health Officer for the City of Detroit.

Good afternoon.

Good afternoon, honorable.

My name is Christina Fox Boy.

I'm Deputy Director of Public Health for the Detroit Health Department.

Good afternoon.

Scott Withington, Detroit Health Department, Environmental Health General Manager.

Good afternoon, Regina Greer, Chief Deputy CFO, Office of the CFO.

Good afternoon, everyone.

And now I'll turn it over the questions from our colleagues.

Starting with Vice Chair Johnson.

Thank you, Mr.

Chair.

I'm just wondering if the health department has a response to the findings.

How you all are addressing any recommendations that have come as a result of the audit before we proceed to questions.

Through the chair, um, I'd love to provide an opening statement.

Uh thank you, Council.

Um, is it okay if I go ahead and do that?

Absolutely.

Uh so good afternoon, everyone.

Uh, good afternoon, honorable uh board um and uh our colleagues from the office of the auditor general.

Um I want to just start off by addressing the Auditor General's May One early communication memo on food safety cash handling.

And I'd like to I'd like to start with where we are today.

So the week before the memo was released, a dedicated cashier from the office of the chief financial officer was onboarded and stationed in the cash room on the first floor of our building over at 100 MEC.

That single action helps resolve a lot of the core findings, uh, of which you know we're taken pretty seriously at the Detroit Health Department.

Checks and Marty orders are being received, secured, and deposited now by a treasury managed cashier uh as recommended by the OAG report.

Um food safety are not uh holding custody of payments, they're not making the deposits, they're not reconciling their own collections.

The scanner has been repaired, view-only access for the auditor general is now in place.

Staff have been retrained on Treasury cash handling policy, and the vendor whose countercheck was returned, uh, has been placed on a corrective track.

And so uh there's also the 2018 CFO cash handling directive.

We're taking a look at that, it's being updated by Treasury and is in final review as well.

And so what this is not just a plan, this is where we are operationally today.

And so I really want to thank the OCFO's office, uh, CFO Studemeyer, Chief Deputy CFO Greer, uh, and our interim treasurer as well.

Their teams move fast, they're moving alongside us.

We're working together.

Um, and they even move before the memo reached your desks.

And so that partnership is the reason I can tell you that where we are today uh is moving forward and taking these findings seriously.

I also um want to be uh uh open and transparent about what this memo surfaces.

Some of these findings track back to a 2013 audit of the department, and so the conditions uh some of these conditions are structural.

Uh they predate the administration, they predate some of the work uh that is ongoing at the department to get it corrected.

Um, and so that's not a comfortable thing to say out loud.

It's it's where we are, uh, but we're saying it out loud as the first step to making sure that we're not sitting uh in the same hearing room.

We take these findings seriously, we're moving on them, have moved on a lot of them, um, and we're working with the OCFO on a durable long-term fix and not just the immediate ones here outlined today.

Um, and unless my colleagues have anything additional to add, we're happy to field and take any of your questions.

Thank you, Director.

Um glad to hear that many of those things uh are in place, are in process, and also the structural change.

I uh appreciate you being transparent and bringing that up.

I know um we'll continue to have conversation around that, especially uh public health and safety committee as well.

Um Deputy CFO Greer, do you have anything to add there?

Uh no, uh through the chair.

Uh Ali uh provided all the context of what what we're doing.

So we I'm happy to answer any additional questions.

All right, thank you.

Anyone else?

All right.

Okay.

Okay.

All right.

Um, he certainly has um addressed uh the fact that there were previous things that happened uh before um the same type of issues were found previously, and um kind of explain the broke down in the structure, the breakdown in the structure and where you're gonna be moving forward to in the future.

So let me just ask you um are there small or minority owned um food businesses that were disproportionately affected uh by payment delays or errors.

Yeah, yeah.

If whoever wants to take that one, all the chair.

We are not uh that far into the off audit, so I would not have that information.

Perhaps the um food safety division management may be able to answer that question for you.

You want to go ahead?

Well, well, well, if they can that would be great.

Um, if not, maybe you can place it on your radar as a part of the audit.

Absolutely.

Thank you.

If if they can, if they cannot, then could you just clarify that uh point you want us to look at?

Yes.

Okay.

Okay.

Okay.

So director, and for folks with the health department, I'm not sure if you called member water's question, but one that um if I could just restate it, uh for uh any minority on food vendors where did the findings here disproportionately impact them with delays in payments or anything like that.

Hello, Scott Withington, through the chair.

Um we take seriously uh trying to uh help uh small businesses, minority-owned businesses, and uh no work to try to do give good service to them.

So I do not believe these issues would have impacted them differently than other businesses.

Okay, um I I'm just interested in knowing now that you're new there, and I think you kind of addressed a part of it in terms.

I'm just still bothered by the the structure of breakdown.

Um you have a cashier that's coming in.

Are there any other things that might have contributed to to such a breakdown?

Through the chair, um council member, you know, uh we're we're figuring that out as we get up to speed.

I will say that uh the primary findings largely will be resolved through the on-site cashier that's now on the first floor of the health department.

Um and you know, my understanding is that that's been a process that's been in place or that that operational move has been in place um for a while, and the uh DHD and OCFO's office uh worked very collaboratively to make sure that that person who started by the way on April 27.

Uh so they're on site at the health department.

Uh and then the issues related to broken scanners or printers or deposit, you know, those are things that we've also now gotten resolved.

Um I'm in touch directly uh with Scott's team, and we're making sure that we have any other breakdowns with technology specifically uh to put in those emergency requests.

And so uh I do feel very confident that the on-site cashier is going to help us with many of these findings and any other issues going forward, we'll put into process proactive steps uh to make sure that they're corrected, especially when it relates to technology.

Okay, all right.

Sounds good.

Thank you, Mr.

Chairman.

Thank you, uh Vice Chair Johnson.

My mic was off.

Thank you, Member Warders, Vice Chair Johnson.

Thank you, Mr.

Chair.

Um, the first question I have is relative to um the lack of segregation of duties.

So typically a nonprofit organization allows for one person to receive the cash, one person deposits it, another person, I believe, puts it into the system to register the receipt.

Um are we saying that the person who's now in the cash room that's going to alleviate those things?

How are the other areas addressed from a not a policy perspective because I'm assuming the city of Detroit because it is as old as it is, those policies are in place.

But how are we ensuring different hands are touching those transactions?

Yeah.

Uh through the chair uh to uh answer council member Johnson's question.

The segregation of duties, uh, our goal is to help ensure that that's resolved, but part of the process now will be the health department actually on um having the detail of what payments are owed when a person or excuse me when a business comes into the health department to make the payment, they are um going to the health department.

I believe they're going there first to um receive the appropriate information, the invoice in order to make the payment, then come down to the cashier's office where the funds will be received.

So now you've got the separation that the health department knows exactly what's being paid and the cashier actually taking the money, and then also uh the Office of Department of Financial Services will be the team actually doing the bank reconciliation to ensure that all three segments are reconciled and and processes done separately.

Okay, thank you for that.

Um other thing that kind of raised the red flag for me, but I think this is being addressed was um the issuance of food service licenses.

Um my initial thought was if someone is receiving a money order um and then they also issue the license, the money order, the license could be issued without the payment necessarily being received by the city of Detroit.

That the payment could have the money order could have been given to someone in the office, and they give them the license, although there's no documentation of the city receiving the funds, or it could have been indicated that the city received the funds, um, although the city may not have, um, and the license was still issued.

So can you all affirm that is being addressed as well?

And I know you just indicated that they go over to the health department and um identify or understand uh what the payment, how much they owe, and then they go to a different area to the cash room and make that payment.

Yep.

Um through the chair, part of our process as we're putting it in place will be the monthly reconciliation of the cash um as well as the health department's um software system, right?

So the health department will be required to provide us the true reporting of the licenses and those numbers from their system, that then will be turned over to the office of the CFO when we do that full reconciliation, right?

So if if we've collected a hundred dollars in the month that relates to five different um vendors, then that should be exactly what's in their system of record, right?

And now we've got that support uh with our bank reconciliation data.

Okay.

Um and the last observation that I have is observation number six, where it says checks were not made payable to the appropriate entity.

Um I'm not sure if the Office of the Auditor General can maybe elaborate a little bit more because I'm trying to understand how we were able to receive actually cash the money order check, whatever, if it was not made out to the correct entity.

Well, I'll I'll just say that banks are not that careful or scrutinizing checks being deposited.

Uh the Kevin can tell you some of the uh other names that checks were made payable to, they should be made payable to the city of Detroit, City of Detroit Treasurer.

And through the yeah, uh they were made to like payable to the Detroit Health Department, where it should be City Detroit Treasurer, and there would be in the instance of like uh uh Ms.

Could Speed mentioned, you know, the bank's not scrutinizing it, where it might say Detroit Health Department, which technically is not the appropriate name that it should have been made payable to.

So I don't believe that any I I can't think of any other instances of names, um, but Ms.

Rambert can they were also uh through the chair, it was also made out to environmental health or just uh Detroit Health Department.

So it was uh many iterations of names.

Thank you for that.

Ms.

Greer, were you about to add something?

Yeah, that through through the chair, thank you.

Um just to add, we did have a follow-up discussion with our treasurer um and the treasury team, and there is a list of acceptable pay names that uh businesses are allowed to um make their checks payable to, right?

The the perfect choice is the city of Detroit treasurer, however, City of Detroit, Detroit Health Department, Health Department, those items um are acceptable as well.

So there is a full list, and we'll make sure the auditor general's team has a copy of that.

Thank you for that.

And I'm not sure if the auditor general's office was um were you all concerned that those checks were not actually cash, so the dollars were not actually received by the city if it was made out to an incorrect entity, or just the fact that it was made out to something other than the city of Detroit Treasurer's office.

At this point, we were concerned that it was made out to something other than the city of Detroit Treasurer.

We were not aware until now that there was an acceptable list that was provided.

Our understanding based on the documentation that we had received was that it should be made out to the city of Detroit Treasurer.

Overall, we are still will investigate.

We plan to do a forensic audit to uh to try to ascertain whether or not the monies that received does reconcile with the licenses that have been issued.

So we'll be looking back, and I'm happy to say I do agree with and I want to thank the OCFO and the health department for moving on our observations as quickly as they did.

That was the purpose of the um early communication, and we're looking forward to uh validating the things they put in place, but certainly going back to uh see what the uh status of the receipts versus licenses.

That reconciliation, as far as we know, has not been done, and so we again plan to go back and do that reconciliation.

Thank you.

Um, and I would just like to ask, like how frequent you all are doing this, and just want to make sure that the reconciliation aspect of it.

Um, so I just want to make sure that there is reconciliation and oversight, if you will, um, I guess from the OCFO, that the money is received.

The um the health department then identifies and indicates that the fee has been received, and also that the bank account shows receipt of the the funds.

So I just want to make sure reconciliation includes all three of those things and would like to understand how frequent you said, I think you said monthly.

Yes, uh, through the chair, uh that is correct.

And just to uh clarify the process that um that I'm speaking about, that's part of the process that we're putting in place.

Um so I don't believe all the full end-to-end was uh may not have been done, but that is what is being put in place now.

And um, you know, through just previous discussions with the auditor general, uh good speed, right?

Um our goal is to continue to work with her, right?

And we're welcoming um and open to any additional um reviews that they have and recommendations, right?

Further as we kind of review the process that we're standing up.

Excellent.

Thank you.

Um and and I would love for us to have this conversation relative to other departments, especially considering the payroll audit uh that was done, because I it sounds to me like there is not enough over sight just to ensure that the policies we have in place are actually being followed.

Um so I'm sure we'll have additional conversations about that.

I've said to my team that I want us to go through that payroll audit um bit by bit over the next 12 months just to uh lift up some things that need to be addressed for me to be comfortable with knowing that um we're all good stewards of the the city's dollars.

So thank you.

And and to the through the chair, um I I piggyback that so OCFO um through our uh CFO Tanya Stademeyer, we are already looking at um this same scenario um across the board to see exactly where OCFO um need may need to recommend and implement some additional changes with some of the other departments um and move from there.

I appreciate it.

Thank you.

Thank you, Mr.

Chair.

Thank you, thank you, Vice Chair Johnson, and just a note for media services.

I believe uh yeah, your mic is a little low, so if we can increase that volume, um thank you.

Um and just uh I I would like to also echo, I do appreciate not only the work of the Auditor General's office and and bring this to folks' attention um and with their early communication of the observations, um, and also the work that the health department OCFO is doing to immediately take action on that.

I think that is um this oversight and the accountability, that's the way things are supposed to work.

Um and so I just wanted to lift that up.

Uh I would I do have a few questions on the processes in which for the health department, no one understand that this is around the food safety operations.

Are there any other revenue streams, whether it be vital records or um environmental uh inspections, uh clinic fees or such that operate under similar cash handling practices?

And have you all initiated department wide internal review to make sure that we are applying the processes that are applied here to those as well.

Through the chair, um I I'd like to invite Scott to maybe share some details, but I will say that as part of you know our new approach at the health department, one thing that I'm taking a look at very closely across the board is one, what programs are touching residents, and that doesn't necessarily include just cash or checks, but it includes all parts of programs or policies and how do we better improve those processes for our residents under the sort of no wrongs no wrong door approach.

Um and so that's and and now when we take a look at some of the food licensing and safety processes, uh we want to make this less onerous for residents.

We want to make sure that we're plugging residents in, whether it's one something to do with our immunizations or clinical operations, uh, and so just as a comprehensive taking a look at all things that the health department does, how do we want to improve those processes so that we're good stewards of the public trust of the public taxpayer?

Um, and then of course, how do we make sure that uh we're improving processes for folks who are coming to the health department?

Uh and then Scott, uh through the chair, anything else to add there?

Um nope, I agree with uh yes, I agree with everything you just said, and we have uh worked uh over the last few years on a number of process improvements to make uh our programs uh easier for our customers.

Um the uh and this uh check processing is part of that.

We are building out a new software and we will involve OCFO and the vendor to make sure that the reporting uh works well for OCFO as well as for us.

Okay, thank you.

And on the aspect for um WCFO Greer, on uh uh the Treasury staff acknowledged that the 2018 CFO directive for cash handling is out of date.

If you could go into like how how many years it has been out of date and and have you all um begun to work on um an updated directive uh to be used.

If you could go into like how how many years it has been out of date and and have you all um begun to work on um an updated directive uh to be used uh to the chair uh the treasury team uh did note that the uh policy is out of date, but from my uh understanding and understanding in prior discussions with them, it was really just the note regarding the list of um endorsements that can be done as well as um how the remote deposit capture um scanner actually can be used.

So it was really just minor tweaks within the policy clarifying uh specific things.

Okay, thank you for that.

And and will they be up would that or would there be an update to that?

So yes, to uh to the chair.

It the um draft is actually already um ready for CFO Tanya Stademeyer.

Um, so it will be submitted to her um probably within the next week for her final review and um approval.

Great, thank you so much.

And um the last question I had, I know folks hear me quite often lift up uh concerns around data security and and the security of our uh folks who do business with the um with the city.

I just had a question on the 2020, the retained 2024 checks that contain account credentials of Detroit food business owners.

Uh was this considered a reportable data security event under city policy?

Um Deputy CFO, if you have any knowledge of that, um to the chair, I am not a hundred percent sure what type of um data security issue that would be.

My understanding is e uh although the checks were found in a non-locked drawer, um, I'm not sure about the security of those checks.

So that I I can't don't think I can answer that question.

Okay.

All right, we may follow uh up on that.

Um, just so the overall uh security policies of the city.

Um I believe those are all the questions that I have so far.

I do want to stress again that um I appreciate the swift work um that is going on to solve these issues and also to bring it to light.

So thank you for that.

I'm looking forward to the um results of the full audit as well.

Any additional questions or anything that folks want to add here?

All right, to the chair, just uh just the fact that uh you know OCFO um taking over the processing of the check handling.

Uh our goal is to allow the health department to focus on what they're supposed to be focusing on, which is the operations.

Absolutely.

Thank you, Deputy CFO.

Appreciate that.

Thank you all.

Um, and with that, is there a motion to receive and file motion?

There's been a motion to receive and file.

Seeing no objections, that action shall be taken.

Thank you all so much.

Have a good afternoon.

Thank you.

All right, so that we will go back up to 5.4.

Um let's see here.

This is a uh from the law department regarding the risk management quarterly report for the third quarter.

Is there a motion to discuss?

Motion to discuss seeing no objections.

Um good afternoon, attorney Anderson.

If you can just state your name for the record.

Good afternoon, Graham Anderson Law Department.

Thank you so much.

Um, just want to have one quick thing for me, because it did come up on public comment.

If you can just go into why these reports are appropriate and appear in the way that they appear.

Yeah, absolutely.

That's a great question.

Um these reports are privileged because it is almost exclusively handling all of the litigation matters that the city of Detroit is involved in.

Um this is you know, active lawsuits, recent settlements.

This is you know, very sensitive information and data that uh but we would not want public, um, especially I mean for opposing counsel, if anything, uh that would just be a huge advantage too.

Um, but as always, I I make myself available to answer uh any questions this council may have um regarding any uh specific matters or um general maybe philosophical questions uh as well.

Thank you.

Thank you for that.

And and just another note for uh just to make sure that I'm correct when there are things such as settlements requests for indemnification as such, folks can keep track of that when it comes before the council, especially the internal operations committee.

Is that correct?

Yes, through the chair internal operations is definitely the committee to uh keep an eye on if that's uh uh an interest of a resident or a member of uh the the administration internal operations is where we approve all of the settlements as well as uh we either determine whether we want to approve or deny the representations and indemnifications.

Thank you.

Thank you.

Any other questions from our committee menu members?

All right, is there a motion to receive and file five point four?

Motion there's been a motion to receive and file five point four.

Seeing no objections that action shall be taken.

Thank you, Attorney Anderson.

Thank you.

All right, that'll move us along in the agenda.

All right, for five point five and five point six.

Um is there a motion to discuss?

Motion uh for five point there's been a motion to discuss and for five point five, just the uh for the administration, Miss Sullivan.

Do we have an update on uh 5.5 through the chair uh for 5.5 and 5.6 those items are from independent agencies, so the administration um does not have uh access to those.

Well, we'll follow up with we can follow with member miller's office to see the status of that.

Uh thank you so much for 5.5.

Is there a motion to bring back in one week?

Motion there's been a motion to bring back 5.5 in one week.

See no objections that action shall be taken.

We did receive 5.6.

Um we would get this over to the folks at budget to get it on the smart sheet, but we did receive 5.6.

Is there a motion to receive and file?

Motion there's been a motion to receive and file 5.6.

Seeing no objections, the action shall be taken for 5.7 and 5.8.

Is there a motion to bring back in one week?

Motion.

There's been a motion to bring back 5.7 and 5.8 in one week.

And for 5.9.

Is there a motion to receive and file?

This is on the agenda as a in new business.

There's been a motion to receive and file 5.9.

Seeing no objections that action shall be taken for 5.10 and 5.11.

Is there a motion to bring back in one week?

Motion.

There's been a motion to bring back 5.10 and 5.11 in one week.

Seeing no objections, that action shall be taken.

We did discuss and receive and file 5.12.

And that will take us on to new business.

Under new business, um, this is from the board of review.

6.1 is submitted responses relative to the 2026-2027 board of review budget analysis from member Johnson.

And then 5.2 is also or 6.2.

Thank you, Member Wards.

Uh 6.2 is responses from the board review from my office.

I will is there a motion to receive and file?

Motion.

6.1 to 6.2.

Seeing no objections, the action shall be taken.

Uh move us on to 6.3.

This is uh from the chief financial officer and the office of budget.

This is a resolution authorizing our American Rescue Plan Act Fiscal Recovery Funds Budget Transfer.

Is there a motion to discuss?

Motion.

There's been a motion to discuss 6.3.

And we have the office, uh the CFO's office.

Good afternoon.

Good afternoon, Mr.

Chair.

And you can just uh state your name for the record, please.

Terry Daniels, director of Office of Development and Grants.

Thank you so much for being here.

Um if you could you may proceed.

Um what you have in front of you is a resolution from the OCFO.

Um, we have identified about 5.3 million dollars in ARPA funding to be reassigned.

Um we have two uh items in the resolution that um our urgent needs, and um are requesting from this honorable body to approve five million dollars to be reallocated for the um role Detroit's young talent program and three hundred thousand dollars for the Mont Elliott Senior Center.

All right, thank you.

And we will go now we'll go for a discussion on questions.

Chair um just for the benefit of the public um I was just going to ask if you can share where the dollars are coming from uh through the chair um we have identified uh multiple projects that have either ended or we were able to repurpose some funding from those projects because they are anticipated to have uh a surplus um so some of the projects include uh demo um some do it network projects uh motor city tech bars for life and adult high school certification which are programs that have both ended um and then there's some surplus funds from um the records management project at Oakman so these are coming from various projects that um that have either wrapped up or we've found some um surplus some uh forecasted surplus thank you for that and do we anticipate there will be any additional reallocations yes uh through the chair to council member johnson um we plan on scrubbing the existing projects even more we're hoping to come back with uh maybe five million dollars or so by early June for uh city council to reallocate to um projects that we have identified that have the capacity to uh take on more dollars and can spend those dollars by the deadline I'm sorry and when did you say early June to do that early June okay all right thank you um I'm always elevate in the basement backup protection program so I'm sure uh we have some additional folks that um would love to receive the support so thank you thank you Mr.

Chair thank you vice chair johnson um just a few questions on my end for the growth grow Detroit youth talent program is would this funds be used to exp extend that programming or is it um or just to be the current program to the chair this is for this this summer's program all right got it and I know these funds have to be expended by before the end of the year and I know I believe September has been identified as a target for the administration uh do we have any um contingency plans for the contingency plans I would say uh in that way we uh we're we're very confident that we will spend these funds um you know before the deadline the the September 30th deadline is when we anticipate that all of our projects will have ended so that would give us another 90 days to wrap everything up and make sure that we have everything spent because the dollars have to not only be obligated but actually paid out before December 31st so we're we're pretty confident that we will have all of the dollars out the door.

Okay just ask yourself okay uh go ahead member waters thank you mr chair then there might be one other opportunity for some additional dollars perhaps tiny bit opportunity right uh through the chair to council member waters um on in this resolution we have uh provided a list of what we call the menu of projects that have the capacity to spend funds um and we've checked with the project project directors and they have confirmed that those vendors can if it can accept the additional money and of course that would have to be approved through council and we would take those contract increases and appropriation revisions back to you okay so but we're monitoring them everything very closely we're looking at everything very closely and please if you have any questions about any of the projects please reach out to our office we can we can give you an update all right thank you Mr.

Chairman thank you um just one last question on I know you said you all are you said you all are still scrubbing is there a full like type of ARPA status dashboard or something like that that we could receive so to the chair there is the ARPA dashboard on the website but our office can come privacy a more comprehensive list and I can get that list to Mr.

Corley and he can distribute it to the entire council.

That would be great.

Thank you.

And speaking of, uh Mr.

Corley, you have any additional questions.

Well, thank you, Mr.

Chair.

Thank you for the um thorough responses and the questions from the council members and help to answer some of my questions.

So I'm I'm fine with the budget amendment.

Um I did ask uh Miss Daniels and her um team to provide council and updated um table or spreadsheet of the 15 opera preparations that council passed back in June 2021.

I just want to see where we're at in terms of expenditures and any free bonuses in those categories.

And um maybe Miss Dansk can speak to that.

How soon uh we can get that.

Uh through the chair to Mr.

Corley, we will have that report to you by the end of the day.

Okay, that's wonderful.

And um, I believe this question is already asked, but just want to make sure.

So council recall last year, uh the administration made available about 9.5 million dollars um in opera monies that were evenly amongst the nine council members.

So that's about a million and 52,000 for each council member to provide monies for council related um uh priorities.

So, Ms.

Daniels, was that your response?

Well, you were saying more information is coming in June that maybe would allow more money for council to evenly divide, you know, to meet some more of their um priorities, like council member Johnson and indicated the the basement um uh program.

Uh through the chair to Mr.

Corley.

Um we will be providing uh a dollar amount to council and we have the recommended um contracts that can take on that additional funding, and we will leave it up to council how you want to divide it up, whether you know several of you want to put it on one program or you know how you want to do it, that is completely up to you, and we will make it work.

And so, Mr.

Chair, so so that's coming in June, or is that early June?

Early June, gotcha.

Okay, but you don't have a dollar mind at the moment of what council may be able to divide up.

Uh through the chair to Mr.

Corley.

Um, last year we were able to give a a nice chunk of money to to council to reprogram.

As these projects start winding down, we're not having um the amount of dollars that we had available last year because these projects have been ongoing and they're still spending.

So we're not gonna have 10 15 million dollars to say here, take this all at once and reprogram it.

It's gonna come in in trickles, yeah.

Okay, okay.

Gotcha.

Okay, okay.

Thank you, Mr.

Chair.

Thank you, Mr.

Corley.

Any additional from colleagues?

All right, motion to approve.

There's been a motion to approve and sent a formal or a recommendation to approve.

Any objections?

CNN action shall be taken.

Thank you.

Thank you.

Appreciate it.

All right, that'll move us on to member reports.

Um, beginning with member wards.

Okay, all right.

Well, I'm going to mention the skill trade task force meeting.

We can never uh say it enough so that we can get people out to participate, which is um next week, Wednesday, May 20th, 4 to 6 p.m.

Farwell Recreation Center, 2711 Outer Drive East, Farraheel Recreation Center, 2711 11, um, East Out of the Drive, 4 to 6 p.m.

And so um we're hoping that people will come out, everybody.

Your uh your chairs and co-chairs, uh Waters and McCampbell and Miller.

So hope to see you there.

Tell your grandchildren, uh tell your children.

Um of the high schoolers who are not planning to go to college, tell them there is a career uh waiting for them.

So the other thing I just want to do is say happy police week.

Um, I want to thank all of our police officers for everything that they do every single day that they put their lives on on the line for us.

We say thank you, we appreciate it.

And so this is their week, and so I wanted to give a shout out to all of our police officers.

Thank you so much.

Thank you, Member Waters.

Vice Chair Johnson.

Thank you, Mr.

Chair.

Just want to say thank you to the community for ensuring that I was at Wayne Elementary this morning for career day.

They were just full of energy.

So that was uh very engaging for me.

So a great way to start the morning.

Uh so appreciate Jackie Perkins in particular, who's kind of the the advocate for Wayne Elementary now, just making sure that the school is not left out uh in the community and that the community wraps its arms around not only the school but the children at the school as well.

Um I also just want to remind District 4 residents that we have our May monthly meeting taking place on Monday, May 18th at 5 30 p.m.

at Impact Church.

That is 1284 Elmdale.

Um so just looking forward to that again, Monday, May 18th at 530 at Impact Church.

Thank you, Mr.

Chair.

Thank you, Vice Chair Johnson.

Um, just will add that I will echo.

Please do come out to the skill trace task force.

Um, you know, those applications for apprenticeship programs are opening up soon with some uh unions, so it'd be good to get have that face-to-face interaction with them to learn how you can be the best candidate for those programs.

Um we will have be having a district seven monthly meeting next Tuesday, May 19th.

Um, and this will be virtual.

So folks can join us virtually from the comfort of your own home and hear from uh the department of um neighborhoods and also the public lighting authority as well to hear more about the mid-block lighting program.

So if you'd like to get the um RSVP or the Zoom link, please do reach out to our office.

You can call us at 313-224-2151, 313-224-2151, or send us an email at Council Member Denzel at Detroit Mi.gov.

And that is it for me.

Um, seeing no further business before this committee, is there a motion to adjourn?

There's been a motion to adjourn, see no objections.

You all have a great afternoon.

This committee stands adjourned.