CEIDC Investigation Continues – Forensic Audit Only the Beginning

By Greg Ritchie

Messenger Reporter

CROCKETT –  The Messenger has obtained the full report of the forensic audit recently concluded and reported to the Crockett City Council of the operations of the Crockett Economic and Industrial Development Corporation (CEIDC). There are many elements to be reviewed but we wanted to update our readers as the information becomes publicly available. 

After voting to suspend operations at CEIDC, the premises are now closed to both the public and employees. Crockett Police Chief Clayton Smith has been called upon to act on some of the findings of the report. 

The forensic audit was not designed nor equipped to judge if there was a fraud or misuse of funds. This must be done by the city, the voters – and if needed – by a jury. The audit was only to show what happened, when and in what sequence events happened. To match checks with bank statements, decisions with board meetings and let others decide what was proper and what was done improperly. 

The city has not fired anyone nor even stopped paying them. While this might seem odd, the city itself is only now beginning its own legal investigation and could not fire someone based on the results of the findings of an outside company. There is a big difference between misappropriation and mis-use of funds. Misappropriation means not sending funds where they were supposed to go – which when using taxpayer money can be a crime. Mis-use can be a question of opinion. The CEIDC could use all of the funds correctly and still accomplish nothing. Or they could accomplish great things but by misappropriating funds. That is the line the new investigations must straddle. 

Some residents may have not known much about the CEIDC one way or the other, while some have spent years and most of their free time pushing for an investigation. One way or the other, it is a big scandal in our small town and will at some point in the future be reset and relaunched with new oversight. 

One of the biggest impacts in the community was the news that CEIDC Executive Director James Gentry had written two checks to himself, totaling $8,400 in bonuses. The forensic audit looked into how this came about and what approvals would have been needed for such payments and what approvals existed for the same. 

As The Messenger reported, this payment was broken up into two payments, each check being made only a couple of months apart but in different fiscal years and the payments seem to be made by Mr. Gentry himself after hours. This was confirmed by the auditors looking at the login information of the CEIDC accounting system records. 

One of the checks was signed by Mr. Gentry, while the other was signed by both Mr. Gentry and the CEIDC Board Secretary. Gentry told investigators this bonus was approved in a July 2020 board meeting. When the auditors went to listen to the recording of the July 15, 2020 meeting, they found the relevant parts of the meeting had not been recorded and Mr. Gentry said the minutes were also not correct and did not show the board voting for this bonus. 

We quote directly from the Forensic Audit Report presented to city council by the auditing firm Weaver and Tidwell, L.L.P:

“Weaver was able to interview four (4) of the five (5) Board members who attended the Board meeting on July 15, 2020. Trustees Barkley and Thompson recalled that the Board approved an increase in Mr. Gentry’s compensation in the form of a salary increase and bonus payment, and acknowledged that the Board’s action was not properly recorded in the meeting minutes. Trustee Castleberry did not recall a Board action to pay a bonus to Mr. Gentry during any of the Board meetings he attended in 2020. Trustee Neel recalled discussion by the Board about a bonus payment but does not recall a formal vote or action being taken by the Board. We also interviewed Darrell Jones, an ex-officio Board member who attended the July 15, 2020 Board meeting (including Executive Session), who informed Weaver that the Board voted and unanimously approved a bonus for Mr. Gentry during the meeting. The City Administrator, John Angerstein, who also attended the July 15, 2020 Board meeting, recalled that the Board approved a salary increase for Mr. Gentry but not a bonus payment.”

Were this a private company, such discrepancies could be tolerated or not – but public entities using public funds have boards, meetings and minutes for this very purpose. It is still unclear what the truth behind these payments is, but at the very least, it shows a casualness in the handling of the people’s money given to CEIDC. 

The Messenger is in possession of other facts which we are working to corroborate before publishing them. As the paper of record for the City of Crockett, we will always work to confirm any news stories before we put them before the public. 

It cannot be said where this will all end but the city continues to move cautiously and deliberately to determine what the the next steps will be for CEIDC and its employees and trustees. 

Greg Ritchie can be reached at [email protected]

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