Corporate Investigative Services

September 20, 2023

Jeffrey Schroder, Esq.

Plunkett Cooney
38505 Woodward Avenue, Suite 100
Bloomfield Hills, MI 48304-5096

RE: City of Warren - Forensic Accounting

RCIS Case: 465771/21-1361558

Dear Mr. Schroder:

Attached please find our Forensic Accounting Report.

Thank you for the opportunity to be of service.

Sincerely,

William Edwards
William Edwards
Director of Financial Investigations

WFE/amh
Enclosure
 Plunkett Cooney
Jeffrey Schroder, Esq.
RCIS Case 465771/21-1361558
September 14, 2023

Confidential Forensic Accounting Report

1500 W. Big Beaver Road, 2nd Floor | Troy, MI 48084 | 248.267.8445

 PRIVILEGED AND CONFIDENTIAL

The information contained in this document is intended only for the confidential use of the recipient(s) named herein. The
information provided in this report was prepared and transmitted under the Michigan investigator/client privilege law and, as
such, is protected and not to be transmitted or transferred without prior written approval of Rehmann Corporate Investigative
Services, LLC (Rehmann CIS). This information is intended for investigative purposes only. If you are not the intended recipient
or an agent responsible for delivering this document to the intended recipient, you are hereby notified that you have received
this document in error and that any review, dissemination, distribution or copying of any part or parts of this document is
strictly prohibited. If you have received this document in error, please notify Rehmann CIS immediately. Rehmann CIS does not
guarantee the accuracy or completeness of outside agency records.

Copyright 2023 Rehmann

1500 W. Big Beaver Road, 2nd Floor | Troy, MI 48084 | 248.267.8445

 TABLE OF CONTENTS
Client Request ............................................................................................................................................................. 2
Executive Summary................................................................................................................................................... 2
Forensic Review ......................................................................................................................................................... 2

Privileged & Confidential

RCIS 465771/21-1361558 | City of Warren
 CASE INFORMATION
RCIS Client Number: 465771

RCIS Case Number: 21-1361558

Case Name: City of Warren - Forensic Accounting

Client Name: Jeffrey Schroder, Esq.

Client Company: Plunkett Cooney

Client Address: 38505 Woodward Avenue, Suite 100

Client Address 2: Bloomfield Hills, MI 48304-5096

Client Phone: 248.901.4000

Client Email: [email protected]

Date Initiated: 11/18/2021

Privileged & Confidential

RCIS 465771/21-1361558 | City of Warren
Page 1 of 4
 CLIENT REQUEST
On November 18, 2021, Jeffrey Schroder, Esq., of Plunkett Cooney, contacted Rehmann Corporate Investigative
Services (“Rehmann CIS”) to request an investigation into possible budget overages incurred by the City of Warren
Downtown Development Authority during its fiscal year ending June 30, 2022.

EXECUTIVE SUMMARY
The City of Warren, Michigan (“the City”) is governed by a seven-member Council, the Mayor, the Treasurer and the
City Clerk. The Downtown Development Authority (“DDA”) is a component unit of the City. A component unit is a
separate legal entity for which the primary government is financially accountable. The DDA was established pursuant
to Act 197 of the Public Acts of Michigan, 1975, as amended, and approved by the Warren City Council to prevent
property value deterioration, eliminate the causes of that deterioration, increase property tax valuation where
possible, and improve economic growth in the business district of the City. It is governed by a board of directors,
consisting of the mayor plus eight members appointed by the mayor subject to the approval of the City Council.

The City Council is responsible for adopting annual balanced budgets for all the primary government’s general,
special revenue and debt service funds as required by the Michigan Public Act 621 of 1978, the Uniform Budgeting
and Accounting Act. The City’s fiscal year runs from July 1 to June 30. The DDA is a special revenue fund that uses
the modified accrual basis of accounting consistent with generally accepted accounting principles.

The City Mayor submitted a recommended budget to the City Council in April 2021 for the fiscal year 2021/2022.
The City Council adopted the 2021/2022 budget at its May 11, 2021 meeting. The adopted budget allocated less
funds to the categories of “contractual services” and “community promotions” than proposed in the Mayor’s
recommended budget. The Mayor’s recommended budget requested $615,000 for “contractual services” and
$75,000 for “community promotions.” The adopted budget allocated no funds for “contractual services” and $10,000
for “community promotions.”

At a DDA board meeting on September 15, 2021, it was recorded in the minutes that “the mayor has decided […] to
move forward with his budget.” A motion was passed by the DDA board to fund the MI Warren, Buy Warren Small
Business Initiative for $60,000, to be allocated to “community promotions.” This amount exceeded the budgetary
allowed amount for “community promotions” by $50,000.

Rehmann CIS was engaged to review the DDA’s disbursements during the 2021/2022 fiscal year to identify any
budget overages. The DDA exceeded the adopted budget in two categories: $410,037.58 for “contractual services,”
and $50,000 for “community promotions.” Rehman CIS determined that the DDA exceeded the adopted budgetary
amounts in both “contractual services” and “community promotions” by $460,037.58.

FORENSIC REVIEW
The City uses BS&A Software (“BS&A”) for its financial management. BS&A allows users to upload copies of source
documents, including invoices to link to journal entries. Rehmann CIS reviewed the source documents for the general
ledger entries for “contractual services” and “community promotions.” The review was limited to these two
categories due to the difference in dollars budgeted between the City Council approved budget and the budget
proposed by the City Mayor.

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RCIS 465771/21-1361558 | City of Warren
Page 2 of 4
 Rehmann CIS conducted a forensic review of the following financial information:

• Bank records and journal entries

• Invoices, receipts and purchase orders
• The City’s Comprehensive Annual Financial Reports (“CAFR”)
• The City’s 2022 Adopted Budget
• DDA minutes of the Board

Contractual Services
The City Council fiscal year 2022 budget approved no funding for “494-9494-80100 Contractual Services.”
Rehmann CIS conducted an in-depth review of the DDA’s financial transactions for fiscal year 2022, as they
related to “contractual services.” The review identified and confirmed that $410,037.58 was disbursed /
expensed to “494-9494-80100 Contractual Services,” all of which exceeded the adopted budget amount. Rehmann
CIS reviewed the invoices and other supporting documentation for the line items listed on the general ledger, which
are detailed below.

Landscape Services
Beginning in 2021, Landscape Services, Inc. entered a two-year contract with the City to provide landscaping
services. The detailed pricing sheet included with its bid divided the services into the following locations:

• City Hall & City Center Park

• Police Station & District Court
• Common Road / Civic Center N / Kennedy Circle N
• NE Corner of Van Dyke & 13 Mile Road
• Eckstein Park
• Community Center & Park
• Mound Road

Rehmann CIS reviewed 21 itemized invoices from Landscape Services, Inc., all entered into the BS&A System totaling
$218,757 (See Exhibit 1). The service locations on the invoices correspond to the seven locations listed in the bid.
Rehmann CIS confirmed the check payments for the 21 invoices.

Beckett & Raeder

Beckett & Raeder is a landscape architecture, planning, engineering and environmental services firm hired by the
City to prepare a historic district plan for the DDA. Rehmann CIS reviewed three invoices totaling $22,197.60. The
project description listed on the invoices was Warren Historic District Plan & Van Dyke Corridor Plan.

Broadcast Selections & Sales, Inc.

The DDA purchased print and television ads to be run during November and December 2021. Rehmann CIS
reviewed six invoices totaling $56,880.00 (See Exhibit 2). The invoices list television ads on WJBK Fox 2, WWJ
CBS/WKBD CW, and WXYZ TV 7 ABC and print ads from Macomb Daily and Warren Weekly.

Hallahan & Associates, PC

Hallahan & Associates is a law firm that was hired to handle tax appeals for property located in the DDA district.
Rehmann CIS reviewed 13 invoices totaling $17,484.41. The invoices provided detailed entry of what project was
billed and how much.

Privileged & Confidential

RCIS 465771/21-1361558 | City of Warren
Page 3 of 4
 The general ledger entries not listed above are detailed in Exhibit 3. Rehmann CIS has retained copies of all the
source documents and can provide them upon request.

Community Promotion
The fiscal year 2022 City Council budget approved $10,000 for “494-9494-88001 Community Promotion.” For
fiscal year 2022, $60,000 was expensed/allocated to “494-9494-88001 Community Promotion,” $50,000 of which
exceeded the adopted budget amount. The monies went to fund the MI Warren, Buy Warren Small Business
Initiative. The City entered into an agreement with Yiftee, Inc. to supply the gift cards. The initiative was to create
incentives for consumers to shop local Warren retailers by purchasing and providing online/e-gift cards. The initiative
was to “stimulate small businesses with COVID relief money.” Rehmann CIS was unable to confirm the use of COVID
relief monies for the gift card purchase and found no specific mention of COVID relief funds being used in either the
2021 or 2022 City of Warren Comprehensive Annual Financial Reports.

Privileged & Confidential

RCIS 465771/21-1361558 | City of Warren
Page 4 of 4
 EXHIBITS
• Exhibit 1

• Exhibit 2

• Exhibit 3

Privileged & Confidential

RCIS 465771/21-1361558 | City of Warren
 EXHIBIT 1

Privileged & Confidential

RCIS 465771/21-1361558 | City of Warren
 CITY OF WARREN DOWNTOWN DEVELOPMENT AUTHORITY
GENERAL LEDGER ‐ INVOICES REVIEWED FOR LANDSCAPE SERVICES, INC.
FOR THE PERIOD JULY 1, 2021 TO JUNE 30, 2022

Invoice
Service Location Number Invoice Date Amount
City Hall & City Center Park 198954 8/2/2021 $ 9,357.00
Mound Road 198956 8/2/2021 $ 12,054.00
Community Center 198972 8/2/2021 $ 2,268.00
Community Center 198972 8/2/2021 $ 2,268.00
Police Station and 37th District Court 198955 8/2/2021 $ 2,268.00
City Hall & City Center Park 200070 8/14/2021 $ 500.00
Police Station and 37th District Court 200071 8/16/2021 $ 1,056.00
Mound Road 200072 9/1/2021 $ 13,254.00
City Hall & City Center Park 200590 9/30/2021 $ 810.00
Mound Road 200592 9/30/2021 $ 1,470.00
Community Center 200595 9/30/2021 $ 2,025.00
Police Station and 37th District Court 200591 9/30/2021 $ 3,240.00
City Hall & City Center Park 201133 10/1/2021 $ 6,238.00
Mound Road 201135 10/1/2021 $ 12,054.00
Community Center 201149 10/1/2021 $ 2,268.00
Police Station and 37th District Court 201134 10/1/2021 $ 1,512.00
Community Center 202733 11/1/2021 $ 3,240.00
City Hall & City Center Park 202715 11/1/2021 $ 8,910.00
Police Station and 37th District Court 202716 11/1/2021 $ 2,160.00
Mound Road 202717 11/1/2021 $ 17,220.00
City Hall & City Center Park 207732 6/1/2022 $ 16,050.00
Common Rd / Civic Center N / Kennedy Circle N 207734 6/1/2022 $ 272.00
Mound Road 207735 6/1/2022 $ 44,870.00
Community Center 207746 6/1/2022 $ 8,000.00
Police Station and 37th District Court 207733 6/1/2022 $ 6,240.00
City Hall & City Center Park 208553 6/30/2022 $ 4,455.00
City Hall & City Center Park 208554 6/30/2022 $ 1,080.00
Eckstein Park 208557 6/30/2022 $ 340.00
Mound Road 208558 6/30/2022 $ 17,220.00
Mound Road 208559 6/30/2022 $ 1,960.00
NE Corner of Van Dyke & 13 Mile Rd. 208560 6/30/2022 $ 544.00
Community Center 208561 6/30/2022 $ 3,240.00
Community Center 208562 6/30/2022 $ 2,700.00
Police Station and 37th District Court 208555 6/30/2022 $ 2,160.00
Police Station and 37th District Court 208556 6/30/2022 $ 4,320.00
Community Center 209014 7/1/2022 $ 1,134.00
 EXHIBIT 2

Privileged & Confidential

RCIS 465771/21-1361558 | City of Warren
 CITY OF WARREN DOWNTOWN DEVELOPMENT AUTHORITY
GENERAL LEDGER ‐ INVOICES REVIEWED FOR BROADCAST SELECTIONS & SALES INC
FOR THE PERIOD JULY 1, 2021 TO JUNE 30, 2022

Invoice
Description Number Invoice Date Amount
Media Invoice Purchase Order #2010801 2070B 10/26/2021 $ 9,530.00

In the Mix Mailing/Postage Invoice #10717 $2,500

Media News Group Macomb Daily $7,030

Media Invoice Purchase Order #2010801 2071B 10/28/2021 $ 1,400.00

MI Warren Buy Warren November Community Gift Card Invoice 2072B 11/6/2021 $ 15,000.00
Purchase Order # 2010801
Week 11/15 WJBK Fox 2 $5,000
Week 11/15 Comcast $5,000
Week 11/22 Comcast $5,000
Media Invoice Purchase Order #2010801 2073B 11/6/2021 $ 4,300.00
Warren Weekly ‐ 11/24 Full Page Color $1,650
Warren Weekly ‐ 12/8 Full Page Color $1,650
Macomb Daily ‐ 11/21 Sunday 1/2 Page $1,000
MI Warren Buy Warren December Community Gift Card Invoice 2078B 12/1/2021 $ 1,650.00
Purchase Order Revised
Week 12/8 Warren Weekly
MI Warren Buy Warren December Community Gift Card Invoice 2074B 12/1/2021 $ 25,000.00
Purchase Order # 2010801
Week 11/29 WJBK Fox 2 $5,000
Week 11/29 WWJ CBS/WKBD CW $5,000
Week 12/06 WXYZ TV 7 ABC $5,000
Week 12/13 WWJ CBS/WKBD CW $5,000
Week 12/06 WXYZ TV 7 ABC $5,000
 EXHIBIT 3

Privileged & Confidential

RCIS 465771/21-1361558 | City of Warren
 CITY OF WARREN DOWNTOWN DEVELOPMENT AUTHORITY
GENERAL LEDGER ‐ INVOICES REVIEWED
FOR THE PERIOD JULY 1, 2021 TO JUNE 30, 2022

Per General Ledger Per Invoice / Receipt

Date Description Detail Number Date Amount
7/21/2021 PLANTERRA CORPORATION ‐ Contract Horticulture Service (price per year) 1287535 6/1/2021 $ 3,963.44
MAINTENANCE Billing cycle: 6/1/21‐5/31/22
Amount: $2,410.20

Bromeliad on Quarterly Rotation (price per year)

Amount: $1,553.24
09/15/2021 DTE ENERGY COMPANY ‐ CIAC For the painting black of (46) posts 90348081 8/27/2021 $ 8,740.00
UPGRADES Location: Van Dyke Between 12 and 13 Mile
Material Description: Street Lighting CIAC

From DTE streetlighting quote:

(46) @ $190 Per Pole

"All (46) existing underground fed streetlights…Will be

painted DTE's standard black paint"
9/15/2021 OTIS ELEVATOR COMPANY Product / Service: Elevator Smoke Head Removal & CVD22785001 2/26/2021 $ 4,481.00
Rewiring
11/10/2021 GIBBS PLANNING GROUP INC ‐ "Scope of Services: Update October 2016 Retail Market 21‐151 11/4/2021 $ 3,750.00
URBAN PLANNING PROPOSAL Research, Participation and presentation 13 October to
Warren City Council of town best practices,
presentation to Warren DDA of town center master
plan and updated market research per September 21,
2020 agreement and Warren PO 2218716 September
21, 2021"
Amount: Principal ‐ 30 hours @ $125/hour
12/03/2021 LIQUID WEB LLC ‐ SERVER Dedicated Server and cyber backups 6050796 11/1/2021 $ 3,660.00

2/9/2022 HUBBELL ROTH & CLARK INC ‐ Improvement: Civic Center Storm Sewer 169337 12/20/2021 $ 5,850.51
ENGINEERING SERVICES Improvements
Activity: Design (workscope approved 12/14/17)

02/09/2022 KNIGHT WATCH INC ‐ Project Name: City of Warren ‐ 8 Full Replacements 21395 9/16/2021 $ 19,233.18
REPLACING EQUIPMENT Parts Mobilization for project $19,006.46
Engineering ‐ 1 Hr @ $113.36
Project Management ‐ 1 Hr @ $113.36
02/09/2022 KNIGHT WATCH INC ‐ Project Name: City of Warren ‐ 8 Full Replacements 23739 11/18/2021 $ 2,885.00
REPLACING EQUIPMENT Installation ‐ 18.25 hours at $113.36
Programming ‐ 6 Hours @ $136.03
2/9/2022 LOWES HOME IMPROVEMENT ‐ (9) 2X4 Troffer Prismatic LED @ $61.73/each 3317084 10/15/2021 $ 563.81
CRIME COMMISSION Other Materials
BUILDING RENOVATION
2/9/2022 LOWES HOME IMPROVEMENT ‐ GE LED 60V A19 RVL FR $7.11 7565261 10/18/2021 $ 432.00
CRIME COMMISSION 7.48‐IN BN FRST GLS FL $12.33
BUILDING RENOVATION (9) 24‐48 CLNG PNL RND TXTD 9 @
$45.84/each…$412.56
2/9/2022 LOWES HOME IMPROVEMENT ‐ Frogtape $9.48 3736294 10/20/2021 $ 126.78
CRIME COMMISSION (2) 116 FL OZ EGG BSC @ $27.53/each
BUILDING RENOVATION (2) [Receipt is illegible] @ $27.53/each
2/9/2022 LOWES HOME IMPROVEMENT ‐ 2x2 Troffer Prismatic LED 3911095 10/22/2021 $ 36.08
CRIME COMMISSION
BUILDING RENOVATION
2/9/2022 LOWES HOME IMPROVEMENT ‐ (2) AFT Craftsman @ $12.14/each 3302201 10/15/2021 $ 24.28
CRIME COMMISSION
BUILDING RENOVATION

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 GENERAL LEDGER ‐ INVOICES REVIEWED
FOR THE PERIOD JULY 1, 2021 TO JUNE 30, 2022

Per General Ledger Per Invoice / Receipt

Date Description Detail Number Date Amount
2/9/2022 LOWES HOME IMPROVEMENT ‐ Historical Building ‐ Various Materials 3841963 10/21/2021 $ 11.33
CRIME COMMISSION
BUILDING RENOVATION
02/09/2022 PARTNERS IN ARCHITECTURE ‐ Project 21‐159 City of Warren ‐ Community Center 4718A 12/27/2021 $ 4,506.50
WCC STADIUM FEASIBILITY Athletic Field Improvements
STUDY "City of Warren and De La Salle Collegiate High School
have agreed to split the cost"
Half of Invoice due from Warren $2,253.23
02/09/2022 THE ENRICO GROUP INC ‐ Project: Historical Bldg. Exterior Door Re‐Key to 9907 10/26/2021 $ 1,760.00
CRIME COMMISSION Schlage FSIC Key Sty
BUILDING RENOVATION 9907
6/29/2022 WOW 19861478/6‐22B Wow Business! 6/2/2022 $ 94.72
City of Warren Dog Park
‐Performance High Speed Internel
‐Additional Bus Static IP
‐BUS WI Fi Modem
6/30/2022 CLARK HILL PLC 1167168 Legal services performed between 1/10/21 to 10/4/21 1167168 1/18/2022 $ 29,501.00
Kevin M. Washburn ‐ 4.60 hours @ $485 = $2,231
John R. Axe ‐ 60.60 hours @ $450 = $27,270

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