Bankole: Detroit Land Bank to face forensic audit

The Detroit Land Bank Authority (DLBA) has been branded as a linchpin of the economic revitalization taking place in the city. Its side-lot program, that allows eligible Detroiters to purchase a vacant lot for $100, has been cast as a catalyst for stabilizing and transforming neighborhoods. 

But the DLBA is also the target of public scorn by frustrated residents who want to contribute to the improvement and revitalization of their communities, yet say the Land Bank evades question about its programs.

In fact, Detroit Mayor Mike Duggan’s mandated community meetings have become a venue for some Detroiters to decry the side lot sales program that DLBA touts as a success. Some complain about what they view as inconsistent application of the Land Bank’s own rules regarding how to own land in the city. Potential buyers of its side-lot programs are left upset, confused and losing faith in city government.

Now Mark Lockridge, Detroit’s auditor general, says he is ready to conduct a forensic audit of the controversial DLBA operations to look at specific items including earlier funds it received as well as the bidding process. Lockridge told me he has the money in his budget to carry out an audit and is looking for an outside firm that will be assigned to conduct this detailed and independent financial examination of the Land Bank’s records.

Lockridge, who recently issued a blistering report on the city’s troubled demolition program claiming it doesn’t follow its own rules, said he is simply fulfilling a 2017 request from Detroit City Council President Brenda Jones.

Jones had long wanted a forensic audit of the public authority, which is the largest landowner in the city. 

“Two years ago, after receiving questions and concerns from the community, as well as having some myself, I requested the auditor general do a forensic audit of the Detroit Land Bank Authority. A forensic audit examines cash flows, payments, accounting and specific financial information. It is different from a performance audit, which analyzes processes and procedures,” Jones told me. “Specifically, I wanted attention given to the demolition advance fund allocated by council to assist with timely payments to contractors. This amount is estimated at between $20-$30 million.”

Jones added, “Additional concerns deal with the administrative costs and other city investments and subsidies given to the DLBA, as well as an analysis of the bidding process. A forensic audit is important because it will clarify and give a report on findings, issues and concerns as it relates to the spending of the taxpayer dollars entrusted to the DLBA from January 2014 through January 2019.”

John Roach, the mayor’s spokesman, said: “The mayor’s office welcomes an audit regarding any city-allocated funds. We will cooperate fully with the auditor general to whatever extent is requested.”

DLBA also welcomed the audit. “We are confident in our current controls and our staff," says spokeswoman Alyssa Strickland. "Our fiscal year 2019 independent financial audit conducted by George Johnson and Co. concluded with an ‘unmodified’ opinion on the financial statement, which is the highest opinion possible, with no financial statement findings or recommendations.”

A forensic audit will get us closer to truly knowing if the Land Bank is a good steward of the public good, especially in the wake of a recent federal demolition probe.

bankole@bankolethompson.com

Twitter: @BankoleDetNews

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