There are a variety of issues that organizations, municipalities and businesses face when dealing with their finances. Whether it's embezzlement, miscalculations or lack of oversight, recovery audits can help determine how much needs to be collected. One county in Georgia will undergo a recovery audit to gain back funds that were lost due to another organization's bankruptcy.
According to the Cherokee Tribune, at a recent meeting of the Cherokee County Board of Commissioners and the Cherokee County Resource Recovery Development Authority (RRDA), county officials reviewed audit proposals from several firms. A recovery audit was recommended to the county by a grand jury after the owner of the Ball Ground Recycling Center, Jimmy Bobo, defaulted on the lease, which was owned by the RRDA. Bobo filed for Chapter 11 bankruptcy and was forced to shut down his business and leave the property, reports the news source.
"This audit has several objectives," Commissioner Harry Johnston told the news source. "One is, to the extent we can, to clear our names. We know we didn't do anything but get caught in a bad deal. And, if there is anything criminal, (this audit will) try to find it. I don't anticipate finding anything."
The Tribune notes that Bobo signed a lease agreement with the RRDA, in which he was to pay $100,000 each month in bond payments to pay for land and equipment for the center. However, Bobo began missing payments, and the Bank of New York contacted county officials and let them know that he failed to regularly put money into the escrow account.
Another step that Cherokee County is taking to avoid this type of situation in the future is to restructure the RRDA, according to The Cherokee Ledger News. Citizens are now able to submit their resumes for a post on the board, and three people will be selected to serve in advisory roles for future dealings.