Fraud, mismanagement, abuse, lack of policies and controls, understaffing and overspending are just some of the findings reported in the four financial audits that have led to major shakeups in Hoover, Helena and Homewood.
At least two of the three cities will soon have new leadership. Brian Puckett, the mayor of Helena, is not seeking reelection in 2025. Homewood's Patrick McClusky resigned his seat just weeks after fraud was discovered under his watch.
Helena has three candidates running for the open mayoral seat: George Pickle, Russ Powers and Billy Rosener.
In the City of Homewood, councilwoman Jennifer Andress and Robin Litaker will face off in a bid to be elected mayor, serving under a new form of government and with a smaller city council and city manager.
In contrast, Hoover's mayor, Frank Brocato, has continued to downplay the results of the City's 2024 forensic audit report and findings from the 2022 report.
He faces a well-funded challenge from Nick Derzis, the police chief, who has made transparency one of the cornerstones of his campaign, garnering the support of the majority of the council and Attorney General Steve Marshall.
BMSS, the auditor responsible for the annual reports of the cities of Hoover and Homewood, explained, "Their audits are not designed to uncover fraud, but if they catch something, it will be reported," according to ABC3340, following a Homewood City Council meeting.
"Audits from state examiners are more designed to uncover mismanagement and fraud," BMSS told the council.
Hoover
When Hoover's most recent chief financial officer, a former BMSS employee, was hired by the City, she recommended that an outside audit be conducted; however, Brocato and the council didn't turn to the state's Department of Public Examiners who investigates City's free of cost and can refer matters to the State's Attorney General's Office for criminal investigations. Instead, in a decision made via email, the city council chose to hire an outside firm, costing taxpayers $236,152, excluding any fees incurred by the City for legal services associated with the investigation, which was run through the city's attorney's law firm.
Brocato and his office went to great lengths to conceal the audit from residents. According to a statement by Hoover City attorney Phillip Corley in an email to Robin Schultz a current candidate for Hoover City Council, Corley's firm, Wallace Jordan, paid $14,586.48 on behalf of the City without reimbursement as "a courtesy to a valued client" so that the City would not have to "put it on the agenda," for a public meeting.
SEE: Hoover's forensic audit firm confirms off-the-books payment, council authorization
RELATED: City of Hoover appears inconsistent on forensic audit as public question period closes
Limitations of the report included the information available to auditors. The report stated, "We requested copies of Hoover's general ledgers for FY 2022 and FY 2023, but as of the date of this draft report, we have not been provided with general ledgers (or "Account Detail History Reports" 26) that balance (i.e., total debits equal total credits)."
In the conclusion of the report, a note spoke directly of the mayor in staffing the city's Finance Department, "The problems in the Department were also exacerbated by being understaffed, as shown in our analyses at Section 4.1 of this report. Multiple employees complained about not having the time to complete their daily critical assignments due to increased responsibilities caused by the staffing changes since 2020." A review of the mayor's proposed budget requests for those years did not reflect a request from him to solve the understaffing crisis created under his watch."
The final line of the Hoover forensic audit was, "Although we did not identify specific evidence of financial malfeasance or asset misappropriation by Hoover employees, the deficiencies noted throughout this report could create an opportunity to commit financial fraud."
Homewood
The City of Homewood has had two recent concerning audit reports.
The results of its annual fiscal year audit for the period ending Sept. 30, 2023, will be released in February of 2025. According to a report by ABC3340, the report was delayed due to the criminal investigation into nearly a million dollars stolen by former finance director Robert Burgett. The state's audit revealed that Burgett attempted to steal $1.8 million from the City's bank accounts but succeeded in embezzling $947,059.46.
Burgett pleaded guilty to three federal charges of wire fraud and was sentenced to 37 months in prison in April 2025, according to the Federal Department of Justice.
The FBI and the Homewood Police Department investigated the case with assistance from the Alabama Department of Examiners of Public Accounts.
The State's audit, conducted by the Department of Public Examiners, was in response to an ABC3340 special report on credit card expenditures. That report found, "City to reduce 'out of control' number of credit cards; $867,000 spent over twelve months"
That report showed, "Credit card statements also show hundreds of Amazon purchases, multiple Disney Plus charges in a single month, Sirius XM and YouTube charges."
The State's investigation found a "Lack of or Ineffective Management Oversight" by the city council, and among other problems, "Lack of Internal Controls" and "Poor Record Keeping" from within the City, which were within the mayor's responsibilities at the time.
The conclusions stated, "In addition, the City Council and management of the City did not establish and implement effective internal control policies and procedures, nor did they provide effective oversight of the City's operations to provide accountability for the use of public funds. The absence of controls exposed the City to monetary losses from theft and misappropriation of assets and prevented the City from complying with applicable laws and regulations."
Sources say that Carr, Riggs & Ingram have also completed a forensic audit. The April 22 city council agenda shows "Council approved a request for consideration to authorize the Mayor to sign a contract with Carr, Riggs, & Ingram for accounting work to handle city finances until a new finance director can be hired." However, an email from 1819 News to the city clerk, requesting details related to the forensic audit, went unanswered.
Helena
The City of Helena's annual audit revealed that the city overspent its budget by over $11 million. The mayor there also downplayed the long-term implications of the overspending, while the city is set to vote on a 1% tax increase to address what has been termed a funding crisis.
SEE: City of Helena introduces tax increase following negative audit report, spending concerns
AL(dot)com investigated the City's spending, going over its finances with Sungho Park, a University of Alabama assistant professor of public policy and administration. Park told the outlet, "[T]he city's debt ratio of 0.896 far exceeds acceptable standards of 0.03 and contradicts the city's fiscal policy. He also found that the city's long-term liability is high-risk."
"Both indicators point to substantial long-term fiscal risk for the city," Park said.
City funding has been one of the top issues in Helena's municipal elections this cycle. Two of the candidates for mayor have relied on their management and fiscal experience in trying to win over voters.
Voters will go to the polls on August 26 to determine who will lead each of these cities as they continue to address not only the issues detailed in their audits but also work to regain public trust.
Rachel Riddle, chief examiner for the Alabama Department of Examiners of Public Accounts, told ABC3340 during their investigation of Homewood's credit card spending, "The state does not routinely audit cities like it does county governments, but if issues are raised, examiners have the authority to launch a review."
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