Internal audit reveals ‘fraudulent activity’ at Memphis community center


MEMPHIS, Tenn – The City of Memphis said it’s making changes after an internal audit uncovered unsettling information about the way money was handled at Bert Ferguson Community Center and other community centers.

WREG uncovered the internal audit, which was recently concluded.

Auditors analyzed the way its community centers handled money from things like food, day camps, classes and most importantly facility rentals, which alone generated more than $339,000 from July 1, 2017 through December 31, 2018.

According to the audit, WREG learned the entire money collection process “needs improvement” and here’s why:

It states money was handled and documented differently at each community center. Receipts and records were missing or not logged into the system correctly.

Money orders and cashier checks were not made payable to the city like they were supposed to be. Some centers took cash even though that’s not allowed. Rental security deposits weren’t always stored in a lockbox or deposited into the city’s bank account in a timely manner.

The mayor’s administration wouldn’t agree to an interview, but sent a brief statement saying they asked for this audit when “the parks and neighborhoods division noticed an irregularity in the deposits and fees from rentals” in one community center in 2017.

The audit gave more details about “fraudulent activity” at Bert Ferguson Community Center. It states money went to the booster club despite the city having any knowledge or approving it, and there were “questionable payments made to community center employees” for work they couldn’t justify.

A section of the city’s audit report deals with Bert Ferguson Community Center.

The mayor’s administration also told us it alerted authorities but wouldn’t say what authorities or if anyone faced any charges or discipline.

“I would like to see them putting money where they are supposed to be putting it,” said Clarence Taylor.

Taylor and other taxpayers we spoke with hope the audit is taken seriously.

“The fact that they did an audit, and turned this up is great. I’m sure they’ll fix it and make it better,” Susan Moresi said. “There can’t be enough oversight. Everyone should oversee everything.”

Oversight is one recommendation auditors gave as well as written policies and procedures, more routine site visits and making sure money is locked up.

Days after that audit was released, the interim parks and neighborhoods director responded in a letter we uncovered. He “acknowledges the need” for change.

City officials also assured us they are taking the recommendations from the internal audit and creating policies and procedures to improve the system. They wouldn’t go into detail about the exact changes.


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