Council Members,
I am attaching a copy of the 1998
CSI report on the City of Orange in case you have never read it. My research for the CBAC
has uncovered substantial similarities in the way
"COLLAPSE OF FINANCIAL PROCEDURES
An examination of the city’s financial apparatus revealed lax or non-existent
oversight procedures, serious deficiencies in internal controls and repeated
apparent attempts to circumvent the Council on various spending matters."
You know this is still going on.
Do I need to list the examples?
"Of the more than 2,124 vouchers examined by the Commission, at least 448
lacked supporting documentation. For example, there was no back-up
documentation for the city’s payment of $2,650 for furniture and the and accessories for the mayor’s office in
September 1993........When Chief Financial Officer Kelly was questioned
by the Commission on whether he reviews the vouchers prior to payment, he
sought to disclaim responsibility:......Even if Kelly delegated
these responsibilities to the accounts payable clerk, he was not relieved of
his responsibility to assure that proper procedures were followed. Moreover,
since 1988, the city’s auditors have continually recommended “[t]hat vouchers
be reviewed and audited internally with greater care.”
"Funds were not routinely certified before the expenditures were made, as
required by law: Chief Financial Officer Kelly testified that he never
certifies the availability of funds on the regular bill lists, either by
stamping the lists themselves or by attaching certifications. And, while the
law allows availability of funds to be certified on individual purchase orders,
Kelly admitted that “there may have been” instances when he failed to use
even that method."
I would suggest checking your
bill lists for certification -
"Expenses have been charged to the
wrong accounts: At the least, such a practice makes it impossible for
There are many examples in the FY09 introduced budget
"The following are examples of expenditures that were charged to improper
accounts:...an expenses related to older adults was
charged not to Older Adult Services, but to the Mayor, Business Administrator
and Administrative Services for years 1989 through 1991 and 1993. If the
expenses had been properly charged, then Older Adult Services would have
substantially exceeded its budget in all years except 1991."
There are similar examples in the FY09 introduced budget
"The Administrative Services-Office Supplies account was employed
repeatedly to include expenses that belonged elsewhere. The following are but a
few examples:..."
There are similar examples in
the FY09 introduced budget
"ABUSE
OF OFFICE
Questionable hiring practices:"
Mayor Brown told the Commission, “I hire everybody” who works for the city.
Brown has been responsible for a number of hirings of
questionable need based upon favoritism and personal benefit to himself. His largesse in providing patronage positions has
not served the city’s interests and has added to its financial burden."
Fire Director salary, etc.
Recommendation:
"Government positions should be
created and filled only when they serve a legitimate and necessary purpose.
Clearly questionable positions ... must be examined and modified or
eliminated where appropriate. At the same time, there must be a determination
of whether certain positions, such as that of “recreation supervisor,” are
properly classified as full- or part-time and whether
the salaries are commensurate with the responsibilities of such positions.
The Council should aggressively assert its authority with respect to the
employment and retention of City employees"
How about the new employees in
the police department (including Donald Page) that were not requested by the
police department?
"BIDDING/PURCHASING VIOLATIONS"
"The Commission, in an examination of records far more comprehensive than the
sampling used in annual municipal audits, found evidence suggesting repeated
violations of the Local Public Contracts Law in the course of
Recommendation:
"Improper financial, bidding and purchasing procedures: In order to
provide adequate fiscal accountability and oversight, the City Council should
take immediate action to review thoroughly, revise and adhere to clear and
effective written procedures and controls for purchases, submissions of
vouchers for payment and proper reimbursement of employee expenses. Further,
there must be strict adherence to the Local Public Contracts Law for bidding,
to guidelines for obtaining quotations where bidding is not mandated, and to
statutes for certifications of funds and for proper and timely enactment of
Council resolutions related to expenditures".
No bid contracts with Baraff, Breaker, Brilliant Lewis, and others
"The Commission also recommends that
existing law exempting “professional services” from public bidding be
amended by the Legislature to define that term with precision. The current
vagueness of the statutory language invites abuse, such as that which is
evident from the present investigation and findings."
Still being done: Baraff, Breaker, Brilliant Lewis, and others
"Abuse of city vehicles
The Commission recommends .... Individuals
deemed by City Council to warrant such assignments should be required to
record their business and non-business mileage, and the value of any
personal use should be reported to state and federal tax authorities, as
required by law."
The city should issue
W-2 for use of city gas and vehicles used on non city business. The mayor is
not on full time city business.
"THE CITY’S SPENDING HABITS"
"City officials in
There are similar examples in the FY09 introduced budget
"Meanwhile, conferences, both in
There are similar examples in the FY09 introduced budget
"The Commission’s examination of the city’s accounts yielded 11 categories
of questionable or improper expenditures. In calculating the total expenditures
for the categories listed in two through 10 below, the Commission scrutinized
only the accounts related to administrative services, mayor, council, business
administrator, finance and clerk - 35 of the city’s more than 1,000 accounts.
Therefore, it is likely that the total of questionable expenditures in each of
these categories would be greater if the remaining accounts had been included in the analysis."
There are similar examples in the FY09 introduced budget
"Conferences, seminars and travel: From
The FY09 proposed budget lists
over $82,000 for "employee training" the majority of which is League
of Municipalities convention expenses.
"questionable or improper expenditures......Employee coffee: Between July 1988 and
FY09 proposed budget contains several
requests - in $1000 amounts - for meeting refreshments. BA Chen was questioned
about coffee and refreshments charges on the bill list at a recent Council
meeting.
"questionable or
improper expenditures Holiday Observances: Between November 1988
and December 1994, $28,571.38 for holiday observances, including parades, for
Columbus Day, Easter, Halloween, St. Patrick’s Day and Memorial
Day."
There are similar examples in the FY09 introduced budget
"In sum, the
Commission determined that the city’s operations have been burdened by run-away
expenses, by the creation of unnecessary positions for political cronies, by
payment of unreasonably high salaries, by lax financial procedures, by the
absence of purchasing controls and by violations of the public bidding
laws"
This looks way too
familiar..... Let's not make it into another State investigation report. We can
fix this!
Bruce Meyer
Citizens Budget Advisory Committee