Commissioners: Audit rate is 'over-the-top'
After hiring a law firm to determine how the DuPage Water Commission depleted its reserve funds, some commission members want to know why the forensic audit is costing so much.
Several commissioners on Thursday said they were surprised to learn this week the water agency must pay more than $364,000 to the Chicago-based law firm of Jenner & Block and the auditing firm of Crowe Horwath.
About $302,000 of that total is going to Jenner & Block, which has been billing the commission $500 an hour for its work since December.
The commission released the financial data Tuesday after the Daily Herald filed a Freedom of Information Act request March 12. A request for the forensic audit report was not granted, but the Daily Herald obtained a copy of the report last week.
With more invoices expected from Jenner & Block, Commissioner Jim Zay said he would like to see if it's possible to get the bill reduced.
"I don't know why Jenner is charging us so much," Zay said. "We're a government agency."
A Naperville official who has been selected to become the city's next representative on the water panel agrees with Zay.
"Five hundred dollars an hour is a top rate for an attorney on this kind of work," said Councilman Dick Furstenau, who will officially become a water commissioner April 15. "It's really an over-the-top rate. It needs to be capped at something less than that on an hourly rate. We just need to go ask them for that."
Jenner & Block was hired as special counsel to oversee the audit and analyze the results after financial irregularities came to light at the commission, which provides Lake Michigan water to more than two dozen municipalities and agencies.
Earlier this month, the firm submitted a report detailing a series of accounting mistakes and misinformed decisions that led the commission to drain its $69 million reserve fund over a two-year period.
The report indicated there was no evidence of any illegal acts. Instead, the money was misspent by a commission that believed it had about $40 million more in reserves than actually existed.
Financial administrator Max Richter was terminated in October for his role in the debacle, and General Manager Bob Martin and Treasurer Richard Thorn resigned this month.
Commissioner Timothy Elliott said he believes the expenditure for the audit is "some of the most important money we've spent at the water commission."
"It's an outstanding report," he said. "We needed to know what the problem was, and they told us."
Still, Elliott acknowledges the cost of the audit has been "expensive," adding that the invoices from Jenner & Block will be reviewed.
"We are going to talk to them about making reductions," he said, "just as we would with any professional who provides a service."
No matter what happens, Zay said he will no longer vote for a contract unless it includes a cap on spending. "I won't give anybody an open-ended contract anymore," he said.
When commissioners were asked on Thursday night to consider hiring another law firm to do bond work at a rate of $500 an hour, they rejected that idea. Instead, they decided to talk to other firms to see if they could get a better deal.
Audit: Commission rejects bond work for same rate