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Fort Smith board presses to hire internal auditor, questions Baker Tilly contract and approves carryover agenda placement
Summary
Directors discussed a months‑long internal audit vacancy and Baker Tilly’s contract, affirmed confidence in acting city administrator Jerry Dingman, and directed staff to place 2024 carryover requests on a future voting agenda while debating financial risks for utilities.
The Fort Smith Board of Directors on Feb. 25 took up three interrelated administrative matters: filling the vacant director of internal audit post, the status of interim coverage by contracted firm Baker Tilly, and a request to place 2024 budget carryover items on a future voting meeting agenda.
City staff said the internal auditor recruitment closed with seven or eight applicants; five were placed in a “Tier A” pool as meeting advertised qualifications. City administration and some board members proposed a two‑step screening: have the recruitment firm (referred to in the meeting as SGR) run video interviews of the Tier A candidates, then bring finalists to Fort Smith for in‑person interviews. Director Rigo asked the board to schedule interviews as quickly as possible; multiple directors agreed that the board — not outside parties — should make the hiring decision.
Several directors criticized the current arrangement with Baker Tilly, the outside auditing firm the city retained for interim audit work. Director Savage said, “internal audit is our waste, fraud, and abuse department,” and expressed concern that Baker Tilly had not been visible or communicative; other board members asked for itemized billing and clearer status reports. Administration said the Baker Tilly liaison had begun file review and that a fuller, face‑to‑face update was expected in the coming weeks. The board asked staff to arrange clearer reporting from Baker Tilly and to provide a summary of the 2024 audit plan and what remains to be completed.
The board also discussed the city‑administrator vacancy. After a January action naming Jerry Dingman acting city administrator, multiple board members said they were comfortable with Dingman continuing in that role and praised his performance in recent weeks.
Finance staff presented carryover requests for 2024 that would move unspent or encumbered amounts into 2025. Chief Financial Officer Andy Richards summarized the totals on the list provided to directors: general fund carryover requests totaling about $3,148,000, solid waste $158,000, street maintenance $146,000 and water and sewer $13,000. Richards told the board that some items on the list represent previously executed contracts that were not entered as purchase orders and therefore needed to be carried forward to honor contractual commitments.
Directors raised larger fiscal concerns as they reviewed the carryover totals. Several members emphasized the city’s general fund balance targets and the water and sewer system’s debt‑service coverage requirement. Director Neil Martin said the city had missed its debt‑coverage target for 2023 and warned that continuing to fall short could force rate increases or regulatory actions by bondholders. Richards said the year‑end audit close and adjustments will determine final bond‑coverage figures and that staff expects to have a clearer picture after external auditors begin fieldwork in April and auditors complete related adjustments in the spring.
Board members asked administration to provide the board with: (1) the 2024 audit plan and status of outstanding audit projects, (2) a breakdown of Baker Tilly’s monthly activity and invoices, (3) the list of Tier A internal audit candidates and a timeline for interviews, and (4) a clearer projection of whether the water and sewer fund will meet the required debt‑service coverage once auditors close the books. Several directors suggested identifying nonessential budget items for cuts and looking at possible city asset sales to shore up reserves.
At the end of the meeting the board voted to place the 2024 carryover requests on the board’s next voting meeting agenda for formal consideration and instructed administration to provide the detailed backup described above. The board also agreed to continue filling the internal auditor vacancy via the candidate‑screening steps described and to seek a clearer performance update from Baker Tilly.
What’s next: staff will return with a detailed 2024 audit status, candidate screening timelines and documentation supporting the carryover items ahead of the regular meeting where directors will decide whether to approve the requested carryovers.
