The certified public accountant who first flagged widespread financial irregularities at the Prichard Water and Sewer Board has broken his silence, describing the case in blunt terms: the largest fraud he has encountered in nearly three decades of work in governmental finance.
The accountant, who spoke on condition of anonymity, was originally brought on by the board in June 2021 to help with financial analysis and bond consulting work, not to conduct a formal audit. That changed in January 2022, when three board members asked him to dig into the board’s credit card statements covering a nearly three-year stretch from December 2018 through October 2021. What began as routine consulting work had become, by the members’ request, an investigation into how a public utility’s money had been spent.
In reviewing the transactions, the accountant said he applied what is known in accounting and legal circles as the “reasonable person standard,” a test used to determine whether a decision or action was legitimate given the circumstances at the time. Courts frequently rely on the standard to evaluate not just the outcome of a decision, but the process behind it. “In essence, I asked would a reasonable person make these credit card transactions,” the accountant said. He concluded that many of the charges brought to the board’s attention did not meet that test and ran afoul of guidance issued by the Alabama Ethics Commission.
How the spending went unchecked
When board members pressed him on how the spending could have gone unchecked for so long, the accountant pointed to a breakdown in the most basic safeguards of financial oversight. He said the board lacked proper segregation of duties, meaning a single individual was able to control assets, authorize transactions and then approve those same transactions without independent review. The concept is foundational in accounting: no matter how small an organization, the person who spends the money should never be the person who signs off that the spending was proper.
He also said the board’s fiscal services department failed to flag or report the questionable charges as they occurred. In a functioning system, internal staff serve as the first line of defense — reviewing statements, questioning unusual vendors, escalating anomalies to the board. That layer either did not operate here or did not act, and the charges moved through month after month without challenge.
Although two board members eventually filed ethics complaints over the spending, the accountant said the rest of the board fell short of its core obligations, including the duty of care, the duty of obedience and the duty of loyalty that members owe to the public bodies they oversee. Those duties — borrowed from the governance standards that apply to nonprofit and public boards — require members to inform themselves, to follow the organization’s mission and law, and to put the public’s interest above personal or factional ones. Falling short of them is not a technicality; it is the measure of whether a board governed at all.
The outside auditor’s blind spot
He also raised concerns about the outside CPA firm the board had hired to conduct its annual audits, saying that firm did not adequately assess the risk of fraud. According to board members he interviewed, the auditing firm never circulated a fraud risk questionnaire, a standard tool used to ask officials whether they had been notified of, or suspected, fraudulent activity within the organization.
Federal auditing rules require auditors of governments to assess fraud risk explicitly, asking leadership directly about known or suspected fraud and designing procedures in response. Skipping the questionnaire suggests the risk assessment was thin.
The accountant said his findings so far represent only a fraction, roughly 20 percent, of what he believes could ultimately be a fraud scheme totaling $1.5 million or more. The estimate matters because it frames the scale: the reviewed period captured only part of the credit card activity, and the pattern he documented suggests the total exposure could be several times what has been counted so far.
Given the scope of the spending and the apparent absence of internal checks, he said the case could eventually give rise to criminal charges ranging from embezzlement to mail fraud, wire fraud and credit card fraud. Those statutes cover different aspects of a scheme like this: embezzlement addresses the taking itself, while the federal fraud statutes reach the use of the mails and electronic transactions to carry it out — and credit card fraud maps directly onto the instrument at the center of the review.
“In my 27 years in governmental finance, this is the biggest case of fraud I have ever seen,” he said. “The residents of the City of Prichard deserve better.” The judgment carries weight because an accountant who has spent 27 years inside the finances of governments has seen every scale of mismanagement and calls this the worst.
The Prichard Water and Sewer Board provides water and sewer service to residents across the city and has faced mounting scrutiny over its financial practices in recent months. The board’s handling of public funds is expected to remain under close watch from both city officials and state authorities as the review of its spending continues.
The board and its city
Water and sewer boards in Alabama operate as independent public corporations, governed by boards appointed to staggered terms and funded by the rates their customers pay. The structure is meant to insulate utility operations from city hall politics and to let long-term borrowing — bonds repaid from rate revenue — support the expensive, never-ending work of pipes, pumps and treatment plants. Independence, however, depends on boards that actually govern, which is why the duties of care, obedience and loyalty occupy such a central place in the review of what happened in Prichard.
Prichard, a city of roughly 20,000 residents in Mobile County, has a history that makes its utilities’ finances a sensitive subject. The city itself has weathered well-documented fiscal crises, including a municipal pension shortfall that drew national attention, and its households — many of them working families — pay rates set by the board under scrutiny. Every dollar lost to a fraud scheme is a dollar not spent on mains, lift stations or the repairs that keep service reliable.
A credit card scheme at a water board also lands on customers in a particular way. Utility rates are set to cover costs, and costs inflated by fraud are built into the bills every household pays. The accountant’s estimate — a potential scheme of $1.5 million or more — translates into a meaningful share of what a small utility’s customers supply through years of payments, which is the arithmetic behind his blunt closing line about the residents deserving better.
What happens next
The immediate work remains the accountant’s review itself, with roughly 80 percent of the potential scheme still unexamined by his own estimate. Completing it will mean working through the remaining statements, tracing the vendors and patterns behind the charges, and documenting the findings in a form that city officials, state authorities and possibly prosecutors can use. Ethics complaints filed by two board members are already in motion, and criminal referral decisions will rest with the authorities who receive the completed documentation.
Governance reforms tend to follow reviews like this one, and the segregation-of-duties failures described in the findings point to the obvious fixes: separating authorization from approval, requiring dual signatures on unusual transactions, ensuring fiscal staff report to the board rather than around it, and replacing the outside audit arrangement with one whose fraud risk assessment is real. For a utility whose independence depends on its board’s diligence, restoring those controls is the condition for regaining public trust.
For now, the residents of Prichard are watching a public accounting unfold in public — three board members’ questions, an accountant’s findings, ethics complaints filed and a potential criminal reckoning ahead. The review of the board’s spending continues, and with it the close watch of the city officials and state authorities to whom the board answers.
The reasonable person standard, as the accountant applied it, is worth unpacking because it will shape how the findings are judged. The test does not ask whether a transaction violated a specific written rule — many questionable purchases at small public bodies are not expressly forbidden — but whether an ordinary, prudent person, knowing what the spender knew, would have made the purchase with the organization’s money. A charge that no reasonable person would make with public funds fails the test even if no policy names it, and that is the standard the Ethics Commission’s guidance reinforces.
The role the accountant found himself in also illustrates how investigations of this kind typically begin. He was hired for analysis and bond consulting — the kind of work utilities commission when they are planning capital projects — and the irregularities he encountered in the course of that work set the review in motion. It was the board members, not the accountant, who expanded the assignment in January 2022 into a direct examination of the credit card statements, and three members acting together provided the internal political cover the work required.
The three-year window under review, from December 2018 through October 2021, spans board transitions and staffing changes, and part of the accountant’s task has been to determine whether the patterns he found were constant across that period or concentrated under particular conditions. Documenting that timeline matters for any eventual accountability, because it distinguishes systemic control failures from conduct attributable to specific individuals and periods.