Conservancy shores up processes after $40M fraud
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Ralph C. Wilson Jr. Centennial Park. Photo: Courtesy of the city of Detroit via Flickr
The Detroit Riverfront Conservancy's board, criticized by some as bloated, will shrink as part of larger reforms made in the wake of a more than $40 million fraud scheme.
Why it matters: After the theft orchestrated by former conservancy CFO William Smith was revealed last year, the DRC underwent a top-to-bottom review to strengthen its governance and prevent future wrongdoing.
Driving the news: As a result, the conservancy on Monday announced a list of changes, some coming and some already in place:
💰 Operations changes: Ensuring multiple levels of review and authorization for all financial transactions, and outsourcing financial services with an independent company.
- Using upgraded technology to better trace all financial transactions.
- More restricted access to financial systems, using analytics and AI tools in regular reviews to spot concerns in DRC's banking processes.
- Another independent audit every three to five years on top of already getting a new auditor.
👥 Board revamp: The board's maximum size will fall from 55 to 30 — the current count is 45. It will eliminate many ex-officio members who serve because of their day job title and not through a typical election process.
- Members will only be able to serve a maximum of three three-year terms.
- They'll also receive new training and accountability through orientations, retreats, conflict assessments and reviews.
💻 Other changes: Human resources services are outsourced to another firm — including payroll, benefits and risk management — to trim costs and allow for better conflict and whistleblower reporting.
- Annual reports will be made public, as well as "governance and operational information."
State of play: Smith is serving a 19-year prison sentence for stealing from the nonprofit for more than a decade, one of the biggest and priciest fraud cases in the city's history.
- Smith used DRC funds to pay for personal charges and doctored bank statements to conceal the scheme, according to the U.S. attorney's office.
- Other organizations stepped in with $35 million during the summer of 2024 to help finish the conservancy's projects amid the embezzlement investigation.
- Its 22-acre Ralph C. Wilson Jr. Centennial Park opened late last month.
What they're saying: "Last year we made a commitment to conduct a thorough review of our governance and finance structures and to implement changes necessary to emerge from this crisis stronger than ever," Conservancy CEO Ryan Sullivan said in a news release.
- "These enhancements set forth a new era of increased oversight that will protect our mission along the riverfront for generations."