Fort Smith Police Chief Nathaniel Clark’s first day on the job was Jan. 9, 2017. Four days later, he formally requested an audit of his department, writing to Internal Auditor Tracey Shockley he recognized “accreditation, inspections, internal audits and inventories as important management quality control tools.”
“These tools help determine if command policies and operating procedures are adequate and are being followed,” he wrote, adding that “immediate assistance is being requested (in reference to) conducting a complete/thorough audit of the Ft. Smith Police Department (i.e. assets, funding sources including asset forfeitures, buy-funds, grants), evidence and narcotics.”
Clark said he was “sure that everything will come up all right; nevertheless, it is imperative that a Police Department internal audit be conducted” and “Recommendations referencing opportunities to improve accountability, modernize processes, enhance controls, and reduce the potential for fraud and/or misuse of city assets will be greatly appreciated.”
Clark’s request was okayed but had to sit until August “because IA was at that time starting on the RVSC (River Valley Sports Complex audit) that was requested by the Board,” Shockley noted to Talk Business & Politics on Wednesday (Jan. 17). The RVSC is currently under investigation by the Federal Bureau of Investigation (FBI).
Once Shockley was able to get to the audit, it yielded problems that included possible mishandling of funds in the Narcotics and Evidence sections of the Criminal Investigations Division (CID). Shockley made the city’s internal audit committee aware of the discrepancies on Oct. 4, 2017, and released the preliminary draft report on Oct. 11. Since that time, the city has released no further information, and they do not have a completion date in mind, though Fort Smith City Administrator Carl Geffken told Talk Business & Politics in a recent interview it would be coming “soon.”
“I think what Tracey’s doing now is finalizing it, but I don’t know if she’s gotten any comments from the Board, since I don’t oversee her. The Board does.” That said, “I think it’s coming soon. She is still collecting information. There was a draft (the Oct. 11 date), but there’s still work to be done. What we’re not doing is going after anything or anyone. What we are doing is making sure our policies and our procedures are correct and right and being followed.”
A member of the internal audit committee speaking under the condition of anonymity told Talk Business & Politics in October that there were “actionable items” in the audit. When asked if that was still a possibility, Geffken said, “I hope not,” but added that, if it were to occur, the final audit “should” bring it to light.
In an October interview with Talk Business & Politics, Geffken said, “The Majors who oversaw the three areas during that time (the audit period from 2015 to YTD 2017) were Major (Mark) Hallum in the criminal investiation division, Major (Larry) Ranells in Patrol, and Major (Dean) Pitts in Support Services. After the Chief (Nathaniel Clark) started in early January 2017, he moved Major Pitts to the criminal investigation division, Major Hallum to the Patrol division, and Major Ranells to Support Services. Majors Pitts and Hallum retired at the end of May (2017).”
HISTORY, SUMMARY OF AUDIT SO FAR
On Oct. 4, 2017, Shockley presented a preliminary draft report to members of the internal audit committee — something she said she “usually doesn’t do” — but given the nature of discrepancies found in the report, the draft was warranted.
On Oct. 11, the draft was released with redactions. In the report, Shockley noted she could not find any prior record of a divisional review or audit. During the planning process, she identified “three high-risk areas to review first,” which included the Narcotics and Evidence sections.
“IA (Internal Affairs) began by obtaining the Police Department policies for Narcotics and Evidence, then a process walk-through was performed for both areas, and the period for testing procedures was selected,” the report stated.
The first part of the testing began with reviewing the “Receipt for Monies From Confidential Buy Money Fund,” FSPD Form # 216, “Receipt for Money From Emergency Fund,” and the “Confidential Buy Fund Ledger Sheet.” FSPD Form #216 is the form used to document how requested “buy money” is intended to be used, the Confidential Informant (C/I) used, and the amount paid to that C/I, Shockley stated.
She continued: “The officers are supposed to document all sections on this form. At the bottom of those forms, there is space for the signature of the officer receiving the funds, for the signature of the officer who will be witnessing payment of the funds to the C/I, and for the signature of the supervisor who is issuing the funds. If any funds are returned the supervisor is required to sign for them. The Fund should function so that the total of the outstanding Forms and the cash in the fund will always equal the total of the fund. Fund reimbursements should be based on issued Forms that are submitted as support for reimbursement. The Confidential Buy Fund Ledger Sheet is a record of all Fund transactions. The Police Department Policies and the related forms are designed to create a ‘chain of custody’ for cash funds in order to provide accountability for all cash monies and to protect the individuals who must have access to cash in order to perform their jobs.”
Shockley compared the C/I Buy Form to the Confidential Buy Fund Ledger Sheet and also reviewed the FSPD Forms and Receipt for Money From Emergency Fund forms. “Because of the number of exceptions noted during IA’s preliminary testing,” she said, “IA concluded that the exceptions should be reported immediately rather than waiting until the completion of the audit. Control policies directly applicable to the cash Funds described above are not being followed.”