There are a growing number of local entities around the state beginning to realize the significance of a forensic audit. Cities,counties, and school district governing bodies are facing mounting questions from the public sector in regards to their financial picture, and putting pressure on elected officials to act on proceeding with an independent forensic audit. The public is no longer accepting the claim by officials that no problems exist within these entities.

Taxpayers are becoming increasingly cynical about the validity of regular financial statements being presented, and the accuracy of standard auditing practices and reports. 

Recently Port Arthur and Killeen, Texas approved forensic investigations of their finances, and Beaumont ISD decided to move forward with one to dig further into the transactions of a several hundred bond project following discovery of discrepancies. All three seeking answers to certain financial patterns and expenditure concerns.

Taxpayers and officials alike are fundamentally requiring and seeking answers to the basic questions about how and why either expenditures, especially, general fund totals, became so out of control and began to gradually and continually exceed revenue, or how special funds or projects were plagued with cost overruns and became a drain on entity resources and assets.

The purpose of a forensic audit is to help identify what went wrong with the budgeting and internal control aspect of city finance and who is responsible for the faulty management and oversight. It assists in revealing who had a present or past role in poor governance decisions and the impacts of these past decisions on current financial conditions. Why were greater internal controls never exercised?

Such entities and their residents are responding to concerns and questions regarding possible financial missteps or failures by current or former employees or officials that may not come to light during a regular standard yearly audit. Entity governing bodies set the scope or parameters of forensic audits to deal with varying circumstances.

We live in times when greater transparency and accountability is needed and demanded for governmental affairs, especially as it applies to the financial health of a city, county, or school district. When an entity is in critical financial decline, governing bodies have a fiduciary duty to provide a diligent and timely prognosis.