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Ohio auditor issues scathing report on Metropolitan Sewer District

62 views · Published 18 September 2018 · 3:18 · Indexed 26 September 2026

Channel: LOCAL 12 · 2018 · News & Politics

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CINCINNATI (WKRC) - A special audit of the Cincinnati Metropolitan Sewer District reeks of financial mismanagement.

The audit reveals what the state of Ohio calls "undocumented work," "misuse of government funds" and "padded expense reports among other violations."

State auditor David Yost says there's plenty of blame to go around. Yost's agency found more than $750,000 ratepayer dollars went to waste.

MSD is in the midst of a $3-billion, court-ordered renovation project to better serve the area's wastewater needs, but the state audit also found wasted money.

"At the end of the day, this is really a story about a bad set of loose controls," said Yost.

The special audit covers 2009-2015 and listed $779,000 in what's called findings for recovery -- money that needs to be paid back to the sewer district by those who benefited.

The biggest beneficiaries are a company called Urban Strategies & Solutions, which benefited $294,000, and Focus Solutions, which benefited $163,000.

Urban Strategies was run by former councilman Sam Malone. Malone was hired as a consultant and was paid rather handsomely for apparently not doing very much.

"We're talking about almost $300,000. No detail on the invoices. No work product. No documentation of anything. So, if there was work that was done, it disappeared into the ether," said Yost.

Focus Solutions was also hired for consulting, and, in nearly two dozen instances, the audit says owner Zola Stewart submitted bills for the physically impossible: working 24 hours a day or more.

"That president claimed that she had other people working at the same time doing that work, but when we pulled the records and went back to look, we couldn't substantiate that," Yost said.

Yost says even if the company did have multiple workers during a 24-hour day, the questionable invoices should have raised red flags and oversight at the time. He says MSD has changed procedures lately to prevent such questionable spending. So, looking toward the future may be good. The past, Yost says, was not.

"I'm convinced that if we continued work and we pulled more transactions, more invoices, more payments, we would find more stuff. But we've proven a point," he said.

Local 12 tried getting comment from Malone and Stewart and their respective companies, but either no one answered the phone, the number was no longer in service or the office was vacant and apparently out of business.

Local 12 also tried to get reaction from former MSD director Tony Parrot, who was in charge during the period covered by the audit. The audit says Parrot is responsible to pay back some of the money because the questioned spending happened under his watch.

Attorney Hal Arenstein, who represents Parrot, issued this statement:

Mr. Parrot is a devoted public servant who discharged his duties in an ethical and legitimate fashion.
Hamilton County prosecutors say they're reviewing the audit but have no other comment at this time. The state auditor says there might be civil lawsuits to recover the money.

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