Michigan Gov. Snyder appoints financial review team for Detroit finances

Financial review team will examine Detroit's money after preliminary review found 'serious financial problem'

Published On: Dec 18 2012 07:08:41 PM EST   Updated On: Dec 18 2012 11:09:55 PM EST
DETROIT -

Michigan Gov. Rick Snyder has appointed a six-member financial review team to examine Detroit's finances.

The appointment of this team comes after the Michigan Department of Treasury conducted a preliminary review of the city's finances and found a "serious financial problem."

Read more: Financial Advisory Board supports emergency financial manager for Detroit

The new team must report findings to Snyder within 60 days, under Public Act 72 of 1990.

According to the governor's office, the preliminary review found several issues including the following:

-- Detroit has violated the Uniform Budgeting and Accounting Act which requires local officials monitor and amend an adopted budget to prevent deficit spending.
-- Detroit projects a cash flow shortage to end its 2013 fiscal year.
-- Due to financial reporting problems, city projections change from month to month, making it difficult to make informed decisions regarding its fiscal health.
-- Estimates of the city's cash flow by June project a $122 million deficit.
-- Detroit officials have not filed an adequate or approved deficit elimination plan with the state Treasury for the fiscal year ending in June 2011.

Read: Moody's downgrades Detroit's bond rating

"My administration has worked, and will continue to work in collaboration, with Mayor Bing and city officials to ensure a revitalized and successful Detroit,” said Snyder in a news release. "However, given the financial crisis that continues to grip the city of Detroit, we must move quickly to ensure city residents have continued access to essential services they expect and deserve. Therefore, I am requesting that this team conduct an expedited review of the city’s finances."

The Detroit mayor's office declined to comment when Local 4 reached out to it on Tuesday night.

The review team includes the following members:

1. Andy Dillon, State Treasurer
2. Thomas McTavish, Auditor General of the State of Michigan
3. Ken Whippel, chairman of the board of Korn/Ferry International, member of Detroit Financial Advisory Board
4. Darrell Burks, senior partner, PricewaterhouseCoopers, member of Detroit Financial Advisory Board
5. Dr. Ronald Goldsberry, consultant, Deloitte Consulting, member of Detroit Financial Advisory Board
6. Frederick Headen, legal advisor for the Michigan Department of Treasury

For more information on Public Act 72 go to www.Michigan.gov/treasury.