Does sheriff's office have authority to hire auditor?

Cook County Commissioners were livid Tuesday upon learning a $220,000 audit had been contracted through the sheriff's office without, they maintained, their knowledge or approval.

The sheriff's law firm that arranged for the audit noted that not only did bills for the audit go through the county board, but a county judge approved them as well.

However, it did concede that those things were done after the contract was let, not before.

Tuesday's brouhaha resulted from an earlier audit this year by county Auditor Laura Burman, who found a discrepancy of hundreds of thousands of dollars in an inmate trust fund. Inmates can contribute to the fund and then use the money to buy supplies at the jail commissary.

Then-sheriff's department CFO Jack Kelly immediately began investigating in conjunction with Burman and found that many of the discrepancies were simply due to poor bookkeeping and were easily rectified. After reviewing several years of records up through 2004, the discrepancy -- which county officials had feared could be as high as $600,000 -- stood at about $240,000.

In addition to the sheriff CFO's work, however, the sheriff's law firm, Querrey & Harrow Ltd. -- with the sheriff's department's approval -- hired an outside auditor, Crowe Chizek and Co. LLC, to independently verify the results, said Daniel F. Gallagher of Querrey & Harrow.

The concern was, said Gallagher, that if someone in the sheriff's office was stealing, you shouldn't simply leave the investigation to the sheriff's office -- an independent check was needed.

So why not approach the board before contracting with the auditors, commissioners wanted to know.

"I think this sets a dangerous precedent," said Republican Commissioner Tony Peraica of Riverside.

Gallagher said not only was the hiring of the firm proper, but it would have been improper to ask the board for permission beforehand, because -- under a court order known as the Duran Consent Decree -- the county board and the sheriff's office have been ruled to have a conflict of interest, and Querrey & Harrow was appointed to represent the sheriff -- not the board.

And because of the urgent need to see if someone was stealing, there wasn't time to go before a judge before hiring the auditor, Gallagher said.

Commissioners weren't buying that.

"That doesn't get over the fact that they still have to get (prior) board approval," said Commissioner Mike Quigley, a Chicago Democrat.

Commissioner Pete Silvestri said using the Duran Consent Decree -- a court order aimed at addressing staffing levels and overcrowding at the jail -- to justify hiring an auditor at a price of $220,000 was a stretch.

"I don't believe that Mr. Gallagher stretched this," said Zelda Whitler, undersheriff of Cook County. Because the jail is under the oversight of a court monitor, and the funds affected the inmates, the hiring of the outside auditor by Querrey & Harrow was proper because the firm would have to defend any action brought by the court monitor in relation to treatment of inmates, she said.

Commissioners still were skeptical and said they intend to call Gallagher to appear before them.

"Mr. Gallagher can spin it and slice it however he wants … it was wrong," said Peraica.

Gallagher said a separate bill from Crowe Chizek was included with the law firm's billing each time and that he would be happy to talk to the board about his position.

Peraica also wants to know what happened to the $240,000 that remains unaccounted for.

Gallagher said the auditors believed that, based on what they found for the years they reviewed, if they continued to audit the three remaining years in question, 2005-2007, they would have eventually accounted for all the discrepancies. But because the point was to determine if someone was stealing or not, they didn't feel it was worth another $200,000 in auditor fees to prove that, Gallagher said.