Detroit emergency manager Kevyn Orr signed his 8th Order (Order) as emergency manager, ordering the inspector general (IG) and the auditor general (AG) to investigate possible waste, abuse, fraud and corruption associated with Detroit’s employee benefit programs. Under the Order, the IG and the AG are required to prepare and deliver a preliminary written report (Report) to Orr within 60 days. Importantly, based on the forthcoming investigation, the Report will likely propose recommendations to Orr regarding how to address any potential waste, abuse, fraud or corruption uncovered.
Orr likely ordered this investigation based on the irregularities found while analyzing the pension plans. Orr’s spokesman stated that Detroit’s General Retirement System could be underfunded by 30% to 40%, while the Police and Fire Retirement System could be underfunded by more than 20%. In recent years, former city officials and businesspeople like Monica Conyers (former city councilwoman and former General Retirement System trustee) and Jeffrey Beasley (former Detroit treasurer) have pleaded guilty or have been charged with corruption relating to the employee benefit programs. Ousting any waste, abuse, fraud or corruption in these benefit programs is critical to Orr’s restructuring and is fundamental to ensuring that Detroit has a solid foundation upon which to grow for decades to come.