Contact: Thea Setterbo, 210-207-7349
SAN ANTONIO (March 20, 2018) — An independent audit conducted by KPMG LLP at the direction of City Manager Sheryl Sculley found no fraud involving funds collected from downtown property owners for the purpose of making improvements to downtown, such as streetscaping, beautification, maintenance and ambassador services.
“I’m pleased and relieved that Public Improvement District (PID) funds were not part of the alleged fraud at Centro San Antonio,” said City Manager Sheryl Sculley. “This audit reaffirms what we believed from the beginning – that PID funds were used as intended and that the alleged fraud only involved Centro’s private funding from membership fees and sponsorships.”
The City contracts with the Centro Public Improvement District (PID) to provide supplemental services to the downtown area. Through this contract, the City reimburses Centro for the services provided within the PID. Centro is a separate entity and private nonprofit organization that was created in 2010 to assist in the redevelopment of San Antonio’s downtown.
Last November, the Board of Directors at Centro discovered that a former Centro staff member had allegedly embezzled funds from the organization and orchestrated a fraudulent audit report and presentation.
Both the City and Centro engaged firms to conduct independent reviews. The City Manager directed the City’s Finance Department to engage an external independent audit firm to conduct a review of the reimbursements made to Centro. The Finance Department engaged KPMG to assess whether fraud occurred within the PID and to review the eligibility of expenses reimbursed. It did not include reviewing other accounts or funds managed by Centro other than the PID.
KPMG’s review was presented to the San Antonio City Council’s Audit and Accountability Committee this morning. KPMG presented that based on their analysis of the PID reimbursement packages and the related sample transaction testing, KPMG did not identify transactions that were proven to be fraudulent. They also noted improvements needed to address deficiencies in the reimbursement packages to include adequate supporting documentation, accounting/clerical errors and general organization.