The City of Amarillo’s internal audit concluded its review of the Amarillo Economic Development Corporation’s (AEDC) expenditures over $25,000 for the fiscal years 2022, 2023, and 2024. This audit was part of the Amarillo City Council’s investigation into a $750,000 transfer of membership dues from the AEDC to The Range, a nonprofit organization, in 2023.
Key findings from the draft internal audit report include:
Expenditure Validation: The auditors extracted and validated expenditure data against the trial balance for each year, focusing on expenditures over $25,000.
Documentation Review: They identified and obtained supporting documentation for these expenditures and reviewed trends in approvals, entries, and deviations in processes.
Budget Analysis: The auditors obtained and validated the budgets for the years in question, noting any changes from the approved budgets and validating revenue sources.
Policy Gaps: The audit highlighted the absence of documented policies, procedures, or control documents to guide exceptions to the budget and expenditure process. There was also no policy for the approval process for budget line transfers or spend thresholds for approvals.
Approval Process: While an approval process within the AEDC was identified, it was not documented.
The audit did not include expenditures from August and September 2024, as this data was unavailable at the time.
The internal audit identified an anomaly with the transaction related to “The Range.” The audit concluded that this transaction was unique over the three years of data reviewed and did not find other transactions treated similarly.
The IA recommended several measures to improve financial oversight and consistency, including:
Creating policies and procedures for documenting AEDC expenditures.
Establishing a dollar approval threshold to ensure a consistent approval process.
Requiring that any budget transfers or changes be approved by both the AEDC board and the Amarillo City Council within a set threshold.
Additionally, the IA plans to extend its audit to include reimbursements to AEDC management and vendors with annual expenditures over $25,000. The audit covered a substantial portion of expenditures and journal entries from 2022 (90%), 2023 (94%), and 2024 (86%).
On Monday, the AEDC hired outside council and issued the following statement:
In recent months, the Amarillo City Council has raised questions about the Amarillo Economic Development Corporation (AEDC), leading to a financial audit of our spending, including our membership to The Range. The audit found no issues of concern.The AEDC remains committed to economic growth, job creation, and expanding our local tax base. Over the past 30 years, with the support of dozens of city council representatives, the efforts of the AEDC have driven in excess of $2 billion in capital investments across our community. In the last 10 years alone, our efforts have created 7,000 jobs and added $390 million in payroll. We are committed to making Amarillo stronger and providing more opportunities for our family, friends, and neighbors.It is our hope that we move forward-together. We have some truly incredible opportunities on the horizon, and it’s critical that we all move in the same direction.That said, it is important we highlight concerns with the council’s continued dialogue regarding our organization that is negatively impacting our economic development efforts, particularly the council’s overtly political move to hire its own attorney, who represents them and not the city or its citizens, to rewrite the articles of incorporation that have enabled our unparalleled economic development success. These articles of incorporation are similar to other EDCs across the state. They have served as the foundation of our organization and many others across Texas since voters approved its creation in 1989, and have held steady under multiple city councils. Facing this challenge, which lacks council unanimity and is an unnecessary cost to taxpayers, the AEDC has hired Jeff Moore, a partner with Brown & Hofmeister, one of the state’s leading EDC experts, to ensure the AEDC can continue serving the citizens of Amarillo and growing the area’s economy.
Andrew Hall, chairman of the AEDC board, said they hired Moore because they felt he would best understand the ramifications of the Amarillo City Council having Hyde rewrite the organization's articles of incorporation.
“We don’t want to make this political. We want to keep our unbiased, nonpolitical status. We just want to keep growing Amarillo and make sure our community is representative and we have that competitive advantage of this great place to live,” Hall said.
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