HomeMy Public PortalAbout2022-33 Resolution Approving a Contract for a Review of Funds and Account Balances and Expenditures for FY21 and FY22RESOLUTION NO. 2022-33
A RESOLUTION APPROVING A CONTRACT FOR A REVIEW OF FUNDS AND ACCOUNT
BALANCES AND EXPENDITURES FOR FY21 AND FY22
WHEREAS, the City of Riverdale, Iowa ("City") is a municipal corporation, organized and
operating under the laws of the State of Iowa, and;
WHEREAS, a concerned citizen has raised questions regarding the City's FY21 and FY22
accounting of funds, and account balances and expenditures, "(the project)" and;
WHEREAS, for sake of efficiencies the city sent RFQs to several major accounting firms; and
WHEREAS, the City of Riverdale received two proposals from the RFQ; and
WHEREAS, the attached Letter of Engagement specifies the engagement of Christopher
Fennelly; and
WHEREAS, the City Administrator recommends hiring Christopher Fennelly to complete this
work, and;
WHEREAS, as the project is scheduled presented to the City of Riverdale City Council on June
14th council meeting; and
WHEREAS, the funding source for this project is general contract services.
NOW THEREFORE, BE IT RESOLVED, BY THE CITY COUNCIL OF THE CITY OF RIVERDALE,
IOWA, THAT the Mayor is authorized to enter into a Letter of Engagement with Chris Fennelly
for a total sum not to exceed $6,750.00 to complete a review of the City's FY21 and FY22 of
funds and account balances and expenditures.
Passed and approved this 10th day of May 2022.
APPROVED: ATTEST:
T.
Anthony Heddlesten, lSlayor Kent Royster, C ty
r1 -1/`-i
dministrator
City of Riverdale, Iowa
110 Manor Drive, Riverdale, Iowa 52722 I (563) 355-2511 I www.riverdaleiowa.com
April 22, 2022
Kent Royster
City Administrator
City of Riverdale
110 Manor Drive
Riverdale, Iowa 52722
Statement of Work — City of Riverdale
The following is a proposal to enter into a consulting agreement between and the City of Riverdale
("Client," "you", "your") and Christopher J. Fennelly ("I", "me" "my"). I will provide technical accounting
and consulting services to the City of Riverdale related to the Tax Increment Financing ("TIF") fund and
the city's General Fund for the year ended June 30, 2021 ("FY21").
The scope of work will include the following:
• Meet with client management and personnel to gather information and access to relevant
financial and administrative records
• Meet with any other identified third parties to gain an understanding of any concerns or questions
about the City's accounting for the TIF and General Fund.
• Analyze the TIF fund expenditures and classifications inception to date.
• Review the General Fund budgeted and actual expenditures for FY21.
• Meet with client to provide results of the analysis and determine if expanding the scope of the
engagement to analyze other Fiscal Year activities is warranted.
It is my understanding that a citizen(s) of the City of Riverdale has raised questions about the City's
accounting of expenditures and I have been engaged by the Client to assist in addressing these concerns,
as well as to identify any errors or irregularities that may lead to recommendations to make adjustments
to the books and records of the City for FY21.
Actual hours will be billed at $150 per hour. My billing rate for the various consulting projects outlined
below ranges from $250-$400 per hour depending on the complexity and nature of the investigation. As
an Iowan and resident of the Quad Cities, I have discounted my rate accordingly in an effort to minimize
the financial impact of this project to the City of Riverdale.
Based on discussions with management and review of publicly available documents, I estimate it will take
approximately 30-45 hours to complete this engagement. My ability to complete the scope of work
efficiently will be dependent on Client management and employees providing information and data in a
timely manner. Any expansion of the scope of the engagement will be discussed with the Client and
covered under an additional Scope of Work to be approved by the Client.
I have been engaged to assist and advise you regarding the TIF and General Fund expenditures. I assume
no responsibility and will make no representations with respect to the accuracy or completeness of any
information provided by Client. Any analysis or documentation prepared during the course of this project
represents Client documents and any final determination of the appropriate accounting treatment and/or
adjustments to the TIF or General Fund accounting are the sole responsibility of the Client. I will make no
representations regarding the sufficiency of the work for which this analysis has been requested or for
any other purpose. I have been engaged to provide consulting services to assist in management's analysis
of the TIF and General Fund in order to reach its own conclusions.
The work to be performed will not constitute an audit, review or compilation of the TIF, the Client's
Financial Statements or any part thereof, nor the external examination of management's assertions
concerning the effectiveness of the Client's internal control systems or an examination of compliance with
any applicable laws, regulations or other matters. Accordingly, my performance of the agreed upon scope
of work will not result in the expression of an opinion, or in any other form for assurance on the TIF, the
Client's Financial Statements or any part thereof, nor an external opinion or any other form of assurance
on the Client's Internal Control systems or its compliance with any laws, regulations or other matters.
Fees and Expenses
Fees for the services outlined in this SOE will be based on actual time and materials incurred during the
course of the engagement. My typical hourly rate ranges from $200-$400/per hour based on the
complexity of the investigation and domestic/international considerations. I was born and raised in the
Quad Cities and currently reside in Davenport. Accordingly, I propose an hourly rate of $140 per hour as
a "hometown" discount and based on my understanding of the nature of the project. Any direct expenses
will be directly billed and I expect will be limited to standard IRS mileage rates for travel to Client site,
meals and supplies.
Other Findings/Expansion of Scope
As noted above, if it is determined by management that the time period under analysis needs to be
expanded to other Fiscal Years for the General Fund, I will prepare an estimate and proposal for your
approval.
In the event that the work performed identifies any potentially inappropriate or illegal activities, I would
suggest that I meet with the Mayor of Riverdale and Internal/External Legal Counsel as he/she deems
appropriate to discuss the findings and next steps. In the event it is determined that the work be
expanded to investigate further, I would require a separate letter of engagement and suggest that I be
engaged directly by Counsel in order to keep the investigation protected under Attorney Work Product.
Approved by:
Anthony eddlesten, or
City of Riverdale, Iowa
s/lbog-2._
Date
Christopher J. Fennelly
940 Spalding Blvd
Davenport, IA
52804
(312) 560-5555
Cjfenn13@gmail.com
Experience
Chris has deep experience in investigative and accounting restatement matters in connection with US laws
and regulations, including inquiries by the SEC and the DOJ and FCPA matters. He has over 20 years of
experience in international and U.S. Domestic investigations, accounting restatements, audits and due
diligence assignments, including both external and internal audit experience.
Independent Consultant - (Jan 2014 — Current)
Engaged by the General Counsel of a Privately Owned Midwest Multi -National Corporation to assist in all
manners of Forensic Accounting consulting. Work performed between 2014 and 2020 totaled
approximately 3,000 hours and included assistance with internal investigations, damages analysis for
litigation matters and lost profits analysis for Insurance Claims.
Conducted eleven projects for individuals and small businesses with a scope of work ranging from 20-150
hours. Due to client confidentiality, I have included examples of the scope and nature of some of these
projects:
• Financial Statement analysis and "scrub" to identify any accounting errors or irregularities in
preparation for sale of business
• Conducted interviews and analysis of the books and records of a regional manufacturer to identify
the scope and nature of increases in the percentage of annual scrap rates.
• Investigated the partner of a bar/restaurant related to concerns of embezzlement prior to the
partner "buy-out". Prior to the engagement, the proposed purchase price was $250,000. As a
result of the engagement, the shares were sold for $1 and the partner engaged inappropriate
activities signed a note payable to the primary owner for an additional $150,000.
In certain of these projects, I assisted the Client and Client's Legal Counsel to pursue civil and criminal
charges against third parties and also assisted with preparation of documentation and reports used in
discussions and negotiations with the IRS and State and Local Tax Regimes.
Audit Director, Special Projects Group, Office of Global Compliance -Weatherford International (May
2009 —Jan 2014)
Responsible for leading, managing, developing and implementing the investigative Component of the
global ethics and compliance program for one of the largest providers of oilfield services and products
with operations in over 100 countries and more than 60,000 employees. Responsible to develop and
implement various global compliance policies and procedures, including a Code of Business Conduct, Anti-
Corruption Compliance Manual, Conflict of Interest Policy, Anti -Money Laundering Policy, Insider Trading
Policy, Annual Ethics and Compliance Questionnaire, and Compliance Due Diligence and Integration
Protocols for intermediaries, mergers, acquisitions, and joint ventures.
• Managed a team a 10 accountants and lawyers
• Conducted numerous internal investigations and reported to CEO/CFO/General Counsel and
Audit Committee as determined necessary
• Planned, Managed and Conducted FCPA Compliance Audits in over 40 Countries to determine
compliance with the FCPA and other anti -corruption laws and with the company's Code of
Business Conduct.
• Worked closely with External Counsel and CPA Firm on Companies Audit -Tax Restatement
• Primary Accounting Resource on SEC/DOJ Investigation
• Managed and/or Conducted over 1,500 Anonymous Hotline Matters and liaised with HR,
Internal Audit, Legal and Corporate and Country Management as appropriate
Director, Global Investigations and Dispute Practice, Navigant Consulting (June 2005 — May 2009)
• Based in Hong Kong from 2007-2009 leading Navigant's Asia Pacific Practice
Senior Manager, Ernst & Young Investigations and Dispute Practice, (June 2000— May 2005)
Manager, Ernst & Young Mergers and Acquisitions Practice (January 1998 —June 2000)
International experience includes; Algeria, Angola, Argentina, Australia, Azerbaijan, Bahrain, Belgium,
Bolivia, Brazil, Canada, China, Colombia, Congo, Costa Rica, Denmark, Ecuador, Egypt, France, Germany,
Ghana, Hong Kong, India, Indonesia, Iraq, Italy, Japan, Jordan, Kazakhstan, Malaysia, Mexico, the
Netherlands, Nigeria, Norway, Philippines, Romania, Saudi Arabia, Singapore, Sweden, Switzerland,
Taiwan, Thailand, Trinidad, Turkmenistan, U.A.E., Ukraine, United Kingdom, Venezuela, Vietnam.
Additional Experience
• Mr. Fennelly has worked on over 75 due diligence projects for both private equity and corporate
clients. His due diligence experience include primarily the manufacturing, retail and construction
industry segments, and both international inbound and outbound transactions involving acquiring
and target companies.
» Participated in a six-month National rotation in Ernst & Young's Enterprise Risk Management ("ERM")
Practice. Rotation included development of methodologies and tools focused on the identification
and mitigation of risk throughout the entire enterprise. Conducted numerous client workshops
focused on identifying risks to the client's business and worked with management to design and
implement changes to the control environment.
Education
• Bachelor of Science, in Accountancy University of Northern Iowa, May 1992
Professional associations
• American Institute of Certified Public Accountants
• Association of Certified Fraud Examiners
Investigative Experience
Assisted in house and external counsel on an internal investigation in Thailand, Singapore and Kuala
Lampur related to potential violations of local Anti -Bribery Laws and the F.C.P.A. Investigation
involved potential use of third party agents to remit payments to government officials for award of
service contracts, as well as international trips for government officials allegedly paid for by local
Company executives.
Performed a fraud audit of construction costs on behalf of one party of a $35 million construction
joint venture. Identified approximately one million dollars of fictitious construction costs diverted to
an LLC owned by the JV Partner through fictitious and double invoicing.
Led internal investigation of the People's Republic of China subsidiary of a major food products
company. Coordinated investigation with team members from Mainland China, Hong Kong and
Singapore at multiple client locations, conducting 25+ interviews of employees and third parties.
Worked closely with external auditor "shadow investigation team" in China and assisted Senior
Management and the Audit Committee to present sufficient information to outside auditors to
complete SEC filings. Assisted client in the development of remedial actions and enhancement of the
Chinese subsidiaries control environment.
» Assisted Medical Device Company in the development and implementation of a FCPA Assessment &
Compliance Program for its third party distributor network. Work was performed in conjunction with
the Company's "Post-FCPA investigation" remedial action plan. Site visits included interviews and
transaction testing, controls compliance reviews in over 30 jurisdictions, including China, India,
Vietnam, Thailand, the Philippines, Singapore and Taiwan in SE Asia.
» Investigated potential embezzlement and accounting irregularities at an international subsidiary of a
Fortune 100 manufacturer. Prepared and presented fact finding report to company's board of
directors. Report led to asset recovery and successful prosecution of two company executives.
Assisted client in the development of a remedial action plan to improve the control environment
based on the findings of the investigation.
» Assisted Counsel of a U.S. Multi -National to conduct an internal investigation of potential violations
of the FCPA in the People's Republic of China. Coordinated investigation with outside counsel, client
internal audit and General Counsel's office, and U.S. and China based forensic accounting and
computer forensic investigative teams. Investigation included review of numerous overseas trips with
management from various SOEs and review of transactions and relationships with external sales
agents. Assisted client management in developing and presenting findings to its external auditors and
Audit Committee. Worked closely with Outside Counsel to assist management in the presentation of
findings to the U.S. DOJ as part of a Voluntary Disclosure.
The engagement team worked closely with the Client's Compliance Group to develop a remedial
action plan to address issues identified during the investigation, and prepared the necessary
adjustments to correct the Company's Accounting Books and Records. Action plan included the
development of processes and controls surrounding the future retention of external agents, changes
to requirements for supporting documentation surrounding trips, and other changes to the control
environment.
» Assisted outside counsel to conduct an internal investigation of potential violations of the FCPA at the
Mexican subsidiary of a Fortune 500 Company. Worked closely with Outside Counsel to assist
management in the presentation of findings to the U.S. DOJ as part of a Voluntary Disclosure.
»
Assisted Management and External Counsel of an oil and gas pipeline construction company to
respond to questions and concerns of the Company's external auditor identified during the
investigation of FCPA violations at the Client's South American and African subsidiaries. Investigation
involved over 50 interviews of management and employees of the Company's corporate offices and
African subsidiary and the preparation of nearly 200 responses to external auditors related to specific
documents and issues requiring individual review and assessment to determine financial statement
impact. Responses provided external auditor with sufficient information to satisfactorily complete
audits of the Company's current and restated financial statements. Worked directly with client's
General Counsel and Outside Counsel to draft Company's position paper to the Department ofJustice.
Assisted management of an International Consulting Company in the restatement and issuance of its
SEC Filings. Experience included accounting policy matters, multi -year restatement accounting,
remedial and corrective actions and liaison with external auditors.
» Retained by management of major international manufacturer to perform covert investigation of
several expatriate and local executives in the People's Republic of China. Prepared and presented fact
finding report to company Senior Executives.
Led team supporting the management of a publicly traded retail company under SEC investigation.
Investigation identified improprieties leading to the termination of a senior executive outside of the
scope of the original SEC investigation. Prepared and jointly presented with Company's outside
counsel a fact-finding report to the SEC and DOJ, leading to the termination of the investigation of the
Company.
Performed internal investigation for management of Fortune 500 Manufacturer related to
whistleblower allegations of violations of the F.C.P.A. Worked with management and outside counsel
reviewing email and conducting fact finding interviews. Prepared fact finding report for outside
counsel.
Assisted External Counsel to investigate potential fraud at a publicly traded transportation on behalf
of the Company's Audit Committee. Assisted the company's Audit Committee to provide the outside
auditor with sufficient information to complete SEC filings. Also assisted with pending SEC and DOJ
investigations and client in the development of remedial actions and enhancement of the Company's
internal control environment.
Assisted External Counsel in the investigation of transactions with customers and suppliers, related to
accounting entries and allegations of misconduct at the Canadian division of a multi -billion dollar
wholesale distributor of office products on behalf of the Audit Committee. Assisted in the
development of fact finding report presented to the Audit Committee.
Investigated accounting irregularities at a telecommunications company on behalf of the Audit
Committee. After whistleblower allegations prompted an SEC investigation, assisted the Audit
Committee with the fact-finding presentations to outside auditor and SEC, leading to the termination
of the SEC investigation.
Functioned as project manager for a team of 20 professionals on a six month internal investigation
and analysis of thousands of contracts for assets under management for the general counsel of one
of the world's largest Financial Services firm. Engagement included analysis of multiple reporting
entities on an unconsolidated and consolidated basis. Management shared the results of the analysis
performed with the Firm's external auditors, and it was determined that an accounting restatement
of previously issued Financial Statements was not necessary.
Performed an investigation for the management of a Manufacturing Company of a Divisional
controller of a major business segment suspected of embezzling. Identified and documented a theft
of nearly a half million dollars leading to the prosecution of the employee and partial recovery of
assets.
» Investigated the activities of the former owner of a recently acquired Company serving the role of
President. Identified and documented accounting irregularities resulting in a purchase price
adjustment of approximately $5.0 million (10% reduction). Investigation also identified
approximately $250,000 of assets diverted by the subject of the investigation during the first two
months post acquisition.
• Performed an internal investigation of time and expense reporting for a privately held manufacturing
Company. Coordinated investigation at 9 international and 13 domestic locations. Identified and
documented the embezzlement of funds of three individuals leading to prosecution and restitution.
Assisted client with the implementation of a global time and expense reporting control system.
Performed an investigation for the management committee of the activities of two partners of a
regional partnership. Investigation identified improper use of corporate assets, unauthorized
expenditures and fraudulent client billings leading to the dismissal and prosecution of the two
partners. Additionally, the investigation identified a third partner that was billing and invoicing
personal expenses as professional fees for a company owned by his spouse. Worked closely with the
management committee in dealing with various State and Federal Authorities and Agencies to resolve
the matter.
» Performed an investigation for the audit committee of an SEC registrant of certain accounting and
reporting issues raised by a whistleblower regarding management of an international subsidiary.
Performed an internal investigation of the management of a Dutch manufacturing facility of a Fortune
250 consumer products company. Identified a kickback scheme and embezzlement perpetrated by
the Plant General Manager, Controller and Vice President of Sales. Documented a theft and diversion
of Company assets totally nearly $1.5 million dollars. Assisted the client in the development of
remedial actions and enhancements to the internal control environment.
» Performed an internal investigation for the management of alleged kickbacks and sale of patented
technology of a privately held defense contractor. Prepared fact finding report for Executive
Management.
Conducted a Fraud Scenario Risk Assessment for an approximately $500 million Software Company.
Project included identifying types of potential fraud in the Company's 12 major business cycles (i.e.
Financial Reporting, Treasury, Revenue, etc..) , interviewing over 50 process owner's and senior
executives, identifying mitigating controls and developing recommendations for the implementation
of new controls, or changes to existing controls.
Performed a fraud audit of construction costs on behalf of one party of a $35 million construction
joint venture. Identified approximately one million dollars of fictitious construction costs.