City's finance director is reassigned

FORT WORTH -- The city finance director will be demoted and reassigned effective at the end of business today, less than two weeks after an outside auditing firm faulted the city for sloppy bookkeeping, city officials said Thursday.

City Manager Charles Boswell and Mayor Mike Moncrief issued a joint one-page statement on the reassignment of Jim Keyes after an inquiry by the Star-Telegram.

"It is the city's responsibility to make sure the public's tax dollars are received, spent and accounted for appropriately," Moncrief is quoted as saying. "There's no question that we've found significant weaknesses related to the city's internal fiscal controls, which adversely affected the city's ability to accurately process financial information."

Reached by telephone at home late Thursday, Keyes said the reassignment is "an opportunity to serve the city in another capacity."

Starting Monday, Keyes will be assistant director of administration in municipal courts.

His pay was cut 5 percent, according to a memo from Boswell to Keyes dated Aug. 2, which the Star-Telegram obtained Thursday.

His new annual salary will be $120,224; his previous salary was $126,552. In addition, his auto allowance will be reduced, although city records available late Thursday did not indicate by how much. The memo indicates that Keyes' continued employment with the city will be reconsidered after 13 months.

"Accepting this position does not guarantee you employment until September 30, 2007," according to the memo.

"It is imperative that you maintain a competent or better performance level throughout this period of time."

The auditing firm Deloitte & Touche reported to the City Council last week that $5 million in financial discrepancies were caused by insufficient staff training, sloppy bookkeeping and a lack of checks and balances. Because of the mistakes, the city's 2004 general-fund balance shrank from $73.4 million to $68.5 million. The annual financial report for 2004 was also delayed by more than a year while auditors tried to get to the bottom of the misallocated funds.

Now, the work backlog is spilling over into the work for 2005. The annual financial report for last year is months overdue.

In the statement released Thursday, Boswell said: "One of my highest priorities is to ensure taxpayer dollars are accounted for consistent with sound management principles and practices. We recognize that we have deficiencies; and changes are already under way as we move to resolve them as quickly as possible.

"This change in leadership will allow the finance department to move forward with a renewed sense of purpose and direction."

An interim finance director will be named soon while the city undertakes a nationwide search for Keyes' permanent replacement, city officials said.

Officials declined to answer questions beyond the statement.