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Special Council Meeting June 3, 2014 Page 2 2. Receive, discuss and possibly act on an update of the PEDC forensic investigation. Mayor Frierson said this item was about clarity and objectivity and how as a community to adjust and move forward. He also said one of the reasons he brought this forward was there were two new Council Members. Mayor Frierson said on March 10th the City Council voted 4 -3 to approve a forensic audit of the PEDC, centering on an anonymous letter regarding the PEDC loan agreement with Harris, Walker and Harper Rogers Wade facility. He asked that Mrs. Clifford present the City Council with an update from start to finish. PEDC Board Chair Rebecca Clifford said that PEDC was directed to engage a firm located outside of Lamar County to conduct an investigation into inappropriate practices by the PEDC resulting in fraud, waste, or abuse. She also said the purpose of the audit investigation was to identify weaknesses in PEDC procedures to ensure that the PEDC was operating in the best interest of all citizens of Paris. Based on experience, Mrs. Clifford said she selected Defenbaugh & Associates to conduct the investigation and on April 2, 2014, the PEDC Board authorized her to engage the firm to conduct the investigation for the period of October 1, 2009 to the present. She stated that on April 3, 2014, a contract was executed and to date the firm had been provided with hundreds of pages of documents. Mrs. Clifford said that Mr. Defenbaugh informed her that the investigation was progressing, but that she had not received a written report from him. She asked if City Council had any questions. Council Member Pickle said he was under the impression that Defenbaugh was to have already provided a written report, but they had not and they had been paid for a report. Mrs. Clifford said Defenbaugh had been doing the work and confirmed a written report had not been received. She reiterated hundreds of pages of documents had been sent to the firm relating to operations of PEDC from October 1, 2009 to the present, so that Defenbaugh would have a complete and unbiased picture. Mayor Frierson inquired if Defenbaugh had been providing weekly oral status report as required in the contract. Mrs. Clifford said she had been receiving weekly oral reports. Mayor Frierson confirmed with Mrs. Clifford that a written status report was not given to PEDC for May or June. He inquired how much money had been paid to Defenbaugh and Mrs. Clifford told him the invoice in their packets had been paid. Council Member Pickle asked if she had received a second invoice and Mrs. Clifford said she received one yesterday for $20,850. Council Member Pickle asked about the written report and Mrs. Clifford reiterated that she had not received one. Mayor Frierson wanted to know if Defenbaugh had come to Paris and Mrs. Clifford told him they came to Paris when she interviewed them. Mayor Frierson inquired if anyone else was present at the interview and Mrs. Clifford said Dr. Hashmi was present. Council Member Hashmi said the meeting took place at his office, because it was a work day and they wanted to ask him about his presentation. Council Member Hashmi said he saw them only for a few minutes and explained they could see a copy of the council meeting at which he gave his presentation. Mayor Frierson questioned the charge of $400 for Defenbaugh's trip to Paris prior to the contract being executed. Mrs. Clifford said that she did not question it, because they had already discounted their billing rate. Mayor Frierson confirmed with Mrs. Clifford that the PEDC Board directed her individually to select the firm.