Skip to content

Palmview preparing to take legal action against former city auditor

Two years ago the city of Palmview hired an accountant to create a list of its fixed assets. The city is still waiting for it and is seeking a refund. So says Finance Director Rachel Chapa, who announced to city council members Tuesday she is drafting a letter to former City Accountant Frank Rodriguez demanding a refund of the $15,500 the city paid him to complete a Financial Operations Manual with Fixed Asset List.


Once he receives the letter, Rodriguez will have 10 days to respond or else the city will pursue legal action against him, Chapa said.

City of Palmview Logo

“It is my belief Rodriguez may have attempted to defraud the city because we never received a work product and we have yet to hear from him,” Chapa said, explaining she has tried contacting Rodriguez regarding the payment to no avail. “We just want the money back.”


Rodriguez, who resigned last December, was selected in Nov. 2015 to create the city’s Financial Operations Manual and Fixed Asset List. Chapa said she spoke with Rodriguez during a brief phone call shortly after her appointment where they discussed the report.


“He told me he didn’t feel his work product would be beneficial due to remodeling in the city hall that would affect the report,” she said, referring to a remodeling of city hall last fall. Chapa said the remodeling should not have affected the report because it was supposed to be completed by June 30, 2016, before the remodeling was set to begin.


Attempts to reach Rodriguez were unsuccessful as of press time.


According to an unsigned engagement letter between Rodriguez and the city, the report would’ve provided the city with basic policies that outlined the procedures for accounts receivables, accounts payable, payroll and policies for fix assets while assessing inventory for city hall.


Chapa said the lack of a signature between both entities was unusual. However, even without a signature, Chapa said the agreement letter was legally binding since Rodriguez was periodically billing the city for work from December 2015 through September 2016.  


“The lack of signatures is concerning but it’s still an agreement since the minutes of the meeting made this contract official and he accepted payment, acknowledging there is a contract in place,” Chapa said. “He’s billing so he’s acting like there is a contract even without a signature.”


This action comes after the city of Palmview approved a 2.5-cent property tax increase last month after Chapa provided to council members a presentation showing that the city was still paying off nearly $2 million in loans and that some of the costs associated with the loans could not be accounted for.


During that presentation last month, Chapa said financial records showed the city paid about $30,000 to Rodriguez, but she had no idea what that was for as those records could not be found.


According to Chapa, she has attempted to reach out to Rodriguez via emails, phone calls and letters to to no avail.


Chapa said she sent out three letters between August and September requesting Rodriguez’s reports.


“In the second letter, I told him he is violating the ethical standards of the American Institute of Certified Public Accountants AICPA Code of Professional Conduct by not delivering us this product,” Chapa told councilmembers.


“I think it’s more than a violation, it’s illegal how he billed the city for something he hasn’t done,” Councilwoman Linda Sarabia said.


Chapa said her fourth letter, which she hoped to have finalized and sent out by the end of the week, would be Rodriguez’s last chance to refund the city their money. Chapa said the city is no longer interested in Rodriguez’s report as the Financial Operations Manual with Fixed Asset List is currently being done internally.


“We’re hoping that we’ll get a refund so this money can go back into the general fund,” Chapa said. “We’re in a tough cash flow crunch right now as unfortunately, our city has been mismanaged for so long but we’re making big efforts to get back on track and developing controls in order to prevent this from happening in the future.”


In other business, city council members approved the selection of Pharr-based CPA Luis Orozco to complete the city audit for the 2016 fiscal year.

Leave a Comment