RBG blames Hopewell treasurer's 'misclassified' transactions for city bouncing checks last fall
HOPEWELL – The firm hired to get Hopewell’s fiscal structure back in order has blasted claims by the city treasurer that she has been frozen out of discussions with the firm and City Council about her office’s role in the reboot, noting that her perceived reticence to its recommendations was responsible for Hopewell bouncing five checks last fall.
In a statement responding to the comments from Shannon Foskey and the Virginia Treasurers’ Association, the Robert Bobb Group said those comments were “replete with inaccuracies and demonstrate defensiveness in posture.” During the seven months it has been working on Hopewell’s books, RBG said they and the city “found numerous issues” with Foskey’s office, including a lack of reports on how much Hopewell is owed in delinquent real-estate, personal property, and machinery and tools taxes.
As a result, the city’s checkbook, which the treasurer’s office is responsible for managing, is out of whack.
"The Treasurer wrote five checks in the fall of 2023 that were returned for insufficient funds. In March 2024, numerous checks were also rejected due to a clerical error where a wrong file was uploaded to the city’s bank resulting in several additional non payments before the error was caught,” RBG’s statement read. “To date, the account reconciliations prepared by the Robert Bobb Group team have been completed manually by recreating financial transactions from bank credits and debits, and this process has identified hundreds of misclassified bank transactions.”
RBG blamed the errors on “poor processes and a lack of controls in place to identify errors” in the treasurer’s office – a direct contradiction to Foskey’s claims that the lack of internal controls was on the city side, not hers.
Related: Hopewell treasurer on criticism in report: 'Internal controls are lacking outside of' her office
The work by RBG has appeared to launch a turf war between the city and the treasurer’s office over who is responsible for overseeing Hopewell’s bank accounts.
RBG wrote a Memorandum of Agreement that would temporarily reassign accounting duties from the treasurer’s office to the city finance department until Hopewell could hire its own accountant. It also has recommended City Council seek a charter change from the 2025 Virginia General Assembly that would permanently remove those duties from the treasurer and place them under city administration control.
Foskey fought back against that, claiming that it would take away responsibilities entrusted to a separately elected official who does not report directly to Hopewell. She said she offered an amended MOA that was summarily rejected by both RBG and council, adding that she only signed the original MOA for “the betterment of the city.”
“While the Robert Bobb Group team is currently putting standard operating processes and technical systematic controls in place to avoid a future incident, the current treasurer is still exercising the historical uncontrolled procedures,” RBG said.
The MOA in question was approved by council and signed into effect March 15.
“This MOA details the duties of both the Department of Finance and the Treasurer’s Office and provides a termination agreement at any time with a 30-day written notice,” RBG said. “The press release issued by the Treasurer, March 20, 2024, is replete with inaccuracies and demonstrates defensiveness in its posture.”
RBG said it was hired by Hopewell "to coordinate the communication efforts with the Department of Finance and the Office of the Treasurer to alleviate financial complications incurred by both the past and present Treasurers. The MOA seeks to accomplish this task and protect the financial future of the City of Hopewell.”
In addition to setting up SOPs, RBG is also working with Hopewell to catch up its state-required audits that had not been submitted since 2019. That prompted the 2024 legislature to draft a bill that would codify the state’s ability to step in and help a locality teetering on fiscal distress.
That bill, which was amended to only cover localities within the Crater Planning District – which includes Hopewell – is now awaiting Gov. Glenn Youngkin’s action.
Since August, Hopewell has spent approximately $2.3 million with RBG on the financial reboot.
Bill Atkinson (he/him/his) is an award-winning journalist who covers breaking news, government and politics. Reach him at batkinson@progress-index.com or on X (formerly known as Twitter) at @BAtkinson_PI.
This article originally appeared on The Progress-Index: Advisory firm says Hopewell treasurer inaccuracies led to bounced checks
