Audit red flag

An audit examining Wayne County’s payments to the private owners of the Old Wayne County Building, which houses the county’s administrative offices, is scheduled to be released next week. Just how critical that audit will be remains to be seen.

However, documents obtained by the Metro Times reveal that the county’s auditor general complained earlier this month that he encountered apparent stonewalling and perceived threats of intimidation in his attempt to conduct a comprehensive financial analysis of the lease arrangement.

The 101-year-old structure on Randolph Street is owned by the Old Wayne County Building Limited Partnership, which purchased the building from the county in a controversial deal in 1984. The partnership then hired Farbman Management Group to manage the building. The company maintains the building and collects more than $5.2 million per year in rent and other fees from the county.

Auditor General Brendan Dunleavy’s report is expected to include a review of payments the county made to Farbman Management from 1999 to 2002. But according to letters Metro Times obtained, the management company allegedly was uncooperative in turning over documents Dunleavy requested.

A draft audit report was provided to the Farbman Group offices earlier this month, according to a Sept. 11 letter from Dunleavy to David Farbman, president and chief executive officer of the Farbman Group. (Farbman Management Group is a separate business headed by Farbman Group.) The letter states that the draft report allows Farbman to review it for possible inaccuracies so they may be corrected in the final version.

In this same letter, Dunleavy wrote that he was to meet with Farbman earlier this month to discuss the draft report, but Farbman canceled just three hours prior to the meeting.

“As you are aware, the Farbman Group’s inability and lack of cooperation in providing us with the requested information during our audit has made this meeting very important,” wrote Dunleavy. He also stated, “Throughout this audit the Farbman Group has cancelled many meetings, responded untimely and/or failed to respond. This has been a common practice by your company during this audit. This practice has significantly hampered our audit process.”

The management company denies that it tried to obstruct the audit.

“Farbman Group continues to cooperate and work diligently with the Auditor General towards the completion of a final Audit Report,” according to a written statement issued to Metro Times on Monday. “Such a report takes time, numerous meetings and a spirit of mutual cooperation, within which we are all proceeding.”

The Sept. 11 letter, as well as a second letter dated Sept. 12, reflects mounting frustration on Dunleavy’s part. He is especially critical of a suggestion by the Farbman Group that an outside accounting firm be brought in to conduct an “independent” audit.

Such an internal audit could help the Farbman Group “better understand some of the past accounting ‘short falls’ we identified in the Management Company’s accounting and billing practices,” wrote Dunleavy, but it would neither influence nor delay release of his report.

Dunleavy says that the Farbman Group has been forthcoming with additional information since he met with them last week.

“They have been very cooperative since the Sept. 17 meeting,” he says.

The audit has been ongoing for about nine months.

Dunleavy’s letter indicates that during much of this time, the Farbman Group has not been cooperative. In fact, Dunleavy goes so far as to accuse Farbman of intimidation in his Sept. 11 letter.

“Finally, many of the comments that you left on my voice mail could be viewed as an attempt to intimidate me from performing my duties as Auditor General. I hope this was not your intent, and I truly hope that you and the Farbman Management Group fully understand that the integrity and objectivity of this report will not be compromised by implied threats.”

Metro Times sought comment about the alleged intimidation, but Farbman Group did not respond. Dunleavy would not comment on his letter, but says that he has since received correspondence from the Farbman Group assuring him that “there was no attempt to intimate me from doing the report.”

Dunleavy says that Farbman Group has until Thursday, Sept. 25, to provide him any additional information for the final report, which is scheduled for release the following week.

Staff writer Ann Mullen can be reached at 313-202-8004 or [email protected]
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