Michigan firm picked for forensic audit of Macomb prosecutor accounts

Mike Martindale
The Detroit News
Commissioner Veronica Klinefelt speaks  at a meeting of the Macomb County Board of Commissioners in Mt. Clemens Wednesday, February 27, 2019.

Macomb County will conduct an audit of forfeiture accounts following questions raised by the county prosecutor's use of the funds earmarked for crime fighting.

The Macomb County Board of Commissioners approved a Kalamazoo-based accounting firm Wednesday for a forensic audit of asset forfeiture accounts. The board also questioned expenditures by the county Prosecutor's Office.

The decision follows concerns raised by residents and County Executive Mark Hackel about Prosecutor Eric Smith's use of $1.8 million in expenditures since 2012. 

Forfeiture funds, which are supposed to be designated for law enforcement agencies for crime-fighting purposes, have been spent on Smith's own office purchases and for non-profit organizations.

Commissioner Bob Smith, brother of Eric Smith, attends a meeting of the Macomb County Board of Commissioners in Mt. Clemens Wednesday.

The Michigan-based firm of Yeo & Yeo, which has eight offices across Michigan and experience in municipal audits, was among four firms considered. Thomas O’Sullivan and Jamie Rivette, two principals in the company, appeared before the board and answered questions about how they would proceed with a forensic audit. The board last week approved an examination of expenditures of money taken by the Prosecutor’s Office from drug users, drunk drivers and bad check writers, which become part of the county forfeiture funds.

Board Chairman Bob Smith, who is the prosecutor’s brother, before Wednesday's vote made a motion that the auditing firm would bypass him and report to Veronica Klinefelt, the chairwoman of the Finance, Audit and Budget Committee, and Jim Carabelli, the vice chair of the full board.

“I spoke to some commissioners and don’t want even a perceived conflict of interest in this,” said Smith, who abstained from the vote of an audit of his brother’s accounts.

The board voted 11-0, with one member absent and Smith’s abstention, to approve Smith’s motion. After a brief discussion, they later voted similarly for Yeo & Yeo.

Klinefelt lamented a “circus-like atmosphere” stemming from conflict-of-interest charges floated by public and officials last week. Hackel and Eric Smith held news conferences Monday, accusing each other of inappropriate spending practices. Smith’s concern about an accounting firm named to do the audit led to its elimination because one of its partners was Hackel’s campaign treasurer.

Hackel insists any spending requires oversight from the county treasurer and board.

“We are trying to do what is in the best interests of Macomb County,” Klinefelt said Wednesday. “I would ask people close to this to stop lobbying, calling and emailing board members and let us do our job. Just shut up.”

Board attorney Peter Webster told the board he askedeight firms if they were interested in doing the audit, which was budgeted at $100,000. In addition to Yeo & Yeo, another Michigan-based firm, Andrews Hooper Park, appeared before the board. Two national firms, BDO USA of New York City and Deloitte of Chicago, were unable to attend.

“We understands the urgency to your situation and depending on availability of records, I would anticipate delivering a report within 90 days,” O’Sullivan said.

Yeo & Yeo will obtain receipts and supporting documents for hundreds of checks from the asset forfeiture funds.

The Detroit News reviewed hundreds of checks from the forfeiture account in the past two years and found many sizable amounts were made out to police agencies in Macomb County that are supposed to share in forfeiture funds related to arrests in their communities.

 The review also found checks for significant amounts were written for golf outings, parties, interior decorating and other expenses not normally associated with traditional law enforcement work. Prosecutor Smith has repeatedly insisted all expenditures were appropriate and he welcomed an audit.


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