In late May 2024, sources alerted 1819 News of something unusual happening with the City of Hoover's financials and accounting. The City was not forthcoming with information but quick to deny and deflect.
Subsequent reporting over the last seven months has detailed what many are now calling the "failed leadership" of Hoover Mayor Frank Brocato and City Council president John Lyda.
A review of videos (via the City YouTube and The Hoover Channel YouTube) and media reports shows that half the city council meetings this year have included chaos from not just the dais and the podium but also to the City's "professional staff," both during and after meetings. Yet rather than addressing issues directly, both Brocato and Lyda used their respective bully pulpits to threaten and criticize anyone who questioned them.
Anyone brave or curious enough to ask questions of the mayor has been gaslit by him insisting he and the Council have been "transparent."
However, certain contradictions become more apparent when evaluating the City's transparency claim over the last several months regarding a forensic audit.
Hoover Audit Timeline:
April 9: Kroll Associates, Inc. (Kroll) provides the "City of Hoover, Alabama," a service proposal. John Lyda emails his fellow council members, asking them, "Please let me know ASAP if you believe there's sufficient reason not to move forward on this."
The proposal introduction states, "Thank you for taking the time to meet with Kroll Associates, Inc. (Kroll) and familiarize us with your concerns."
June 5: 1819 News was the first to report the City of Hoover was undergoing a forensic audit after Councilwoman Khristi Driver testified during a Certificate of Need hearing.
According to the hearing transcript, after being asked about the audit Driver asked to speak to the city attorney. She then returned to the stand and confirmed the audit, saying, "My understanding of the purpose of the audit would be to take a look at all of our financials to make sure that everything is in order and to follow up on some of the observations that were made in our most recent audit from our regular auditor."
July 10: Alabama Today prints John Lyda's April 9 email. In it, he attaches Kroll's proposal and says:
"I know there is a shared desire to get moving on this ASAP so that we can get assurance that the recent discovery of financial disarray is due to human error or carelessness rather than fraud."
"The cost is estimated to be between $145k and $177k and is expected to take between 60 and 90 days." The actual costs were over $230,000 and weren't completed until August 24, 137 days after the email.
August 5: Mayor Frank Brocato addresses the forensic audit for the first time, reading a statement to the Council.
In it, he says three things that he, others or the report itself later contradict. "As Mrs. Cornett began to work through these items, she felt a deeper look at our overall processes should be examined."
He notes that "after discussions with city council finance leadership" and others," Kroll LLC was hired "to perform a detailed review of certain general ledger accounts, adjustments, account reconciliations, and transactions, as well as financial software implementation."
"We undertook this review through the city's attorney with the complete knowledge of the city council."
August 19: John Slavek from Kroll spoke at the council meeting, saying he was "in town for interviews."
Among the findings. He notes the deletion of files for the first time.
He says he cannot answer questions because company policy does not allow him to do so until a final report is issued.
August 24: The Final Audit Report is completed, and the results were released. The City declares that no fraud was found.
August 26: 1819 News highlights 10 important observations from the report. Below are direct quotes from the Kroll report that contradict messages from Mayor Brocato that under his leadership, there have been no problems:
"The dearth of experience and apparent lack of accounting skills and resources within the Finance Department has been present for several years and continues today... BMSS also raised the lack of a fiscal policies and procedures manual as findings in their FY 2021 and FY 2022 audits. This finding was noted by BMSS in each of their Management Letters to the Mayor, City Council and Management of Hoover, as shown in the excerpt below."
"A comprehensive period-to-period review and analysis of the financial filings and reporting, including tracing and re-calculating amounts and transactions back to internal accounting records and source documents has not been performed to date."
"Hoover's inability to address Form 941 issues that began in the first quarter of 2020 and continue today have caused the City to incur additional costs to resolve the issue. Cornett is actively working to resolve Hoover's prior Form 941 discrepancies and has taken steps to ensure that Form 941 is timely and accurately completed going forward."
October 3: Hoover Sun reports:
"Hoover Mayor Frank Brocato said that he's already shared the city's financial reporting problems with state officials and that people raising a red flag are doing so for political purposes with a city election coming up next year."
"It is an organized, well-focused attack against us, and it's just complete hogwash," Brocato said of questions from residents about the audit.
Brocato told the Hoover Sun that he's already talked with state officials, including the attorney general's office. "I bared my soul to everybody," the mayor said. "I wanted everything looked at, and it turned out everything was on the up and up. … The state auditor would already have been here if they thought there was something wrong with the City of Hoover."
Contrary to the mayor's statement, the state auditor, Andrew Sorrell, would not be the one to investigate or audit city financial records or potential criminal or unethical activity. According to the Office of the Alabama State Auditor website, their "office tracks state-owned property valued at $500 or more, as well as items deemed sensitive in nature."
October 21: Hoover CFO presented first in a series of quarterly updates on the audit's findings.
The Kroll report was 274 pages long. Cornett's update included 7 PowerPoint slides.
Among the issues marked as "closed," however, are the deletion of files that she and the mayor have said were reported to the State's Attorney General. When asked, William Califf, a spokesman from Attorney General Steve Marshall's office, told Alabama Today, "It is the longstanding policy of this office to neither confirm nor deny the possibility of an investigation."
November 5: City Council takes up Forensic Audit Payment "Resolution Number 8314-24 - A Resolution Amending The Budget For The Fiscal Year Ending September 30, 2024, For Payment To Kroll Associates, Inc. For Professional Services Rendered For Forensic Review Services."
Total amount due: $236,152
Hoover Sun reports: Hoover Mayor Frank Brocato, when asked by McClinton this past (at council work session) Thursday if he would be willing to have Kroll hold a town hall meeting to answer questions, said the City already had given its report.
When asked again by McClinton Monday night, the mayor replied only "Thank you for your comments."
After the meeting Brocato says, "This is 100% politically motivated."
The mayor insists, "Continually bringing up this report is creating unnecessary division and, frankly, a waste of our staff's time."
November 18: Mayor Frank Brocato addresses Council on audit again.
Among the comments, Brocato says:
The Kroll report's findings have been addressed "thoroughly and transparently."
He lectures the "leaker" responsible for information being reported that falls under Alabama's Open Records Act related to the audit.
He calls questions about the audit "divisive rhetoric and politically motivated attacks" "political theatre.
He says, "It could have been very easy for me to address the challenges in our accounting department internally. I chose not to do that."
He stated that operational challenges "have been met with decisive action."
"All questions have been asked. Any questions that have been asked have been answered."
In this particular statement, the mayor pivots from previous statements on the primary cause of the audit. Shifting attention and blame away from his leadership failures, he says it was "Mostly important because there were files missing."
This blame-shifting to the former CFO and city administrator contradicts the 10/21 statement from the current CFO, who, when addressing that same issue, said, "There were electronic files and paper files that were deleted from the offices of the former city administrator and the former CFO/Treasurer." Deletions that she merely called "unfortunate."
The former CFO, however, says that while the deleted "working files," which included emails and phone records, would have provided historical documents, "We do not believe any mission-critical information was lost in the process." She noted, through the clerk's office, BMSS, and Wallace Jordan, the permanent files were recreated. "None of the supporting documentation or proof" was removed as this was hosted in MUNIS.
November 18 (Same council meeting): City Council brings back up and passes previous resolution to pay Kroll.
Councilman Derek Murphy notes that he's requested quarterly reports from CFO on action items as a result of the report.
Councilman Steve McClinton says he spoke to a Kroll representative who is willing to answer questions via email. The City has agreed to collect questions through the City Clerk for two weeks and then forward them to Kroll for answers.
John Lyda says a false statement was made during public comment, "Kroll has not been paid."
December 5: The deadline for questions to be forwarded to Kroll. The City of Hoover deactivated the website post that alerts residents where to email questions.
Apryl Marie Fogel is a Birmingham resident who frequently appears on and guest hosts radio programs around the state. She can be reached at aprylmarie@altoday.com or on X and Facebook at @aprylmarie.
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