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Joan Pratt blames Finance Department for absence of city audits

But, like Rawlings-Blake, she says tough audit reform is moving too fast – and is too costly.

joan pratt at BOE

Joan Pratt attending a recent Board of Estimates meeting with City Council President Bernard C. “Jack” Young and Mayor Stephanie Rawlings-Blake.

Photo by: Mark Reutter

Call it The Blame Game, Act Three (coming after two City Council votes where politicians squabbled over each others’ positions and agendas).

Asked on the radio yesterday why major departments of Baltimore government have not been audited in decades, Comptroller Joan Pratt said that the city’s accounting practices are as good as they could be considering some unusual problems – which she blamed on the Department of Finance.

Many Baltimore departments and agencies don’t do the annual down-to-the-penny financial review that’s needed by Pratt’s Department of Audits in order to perform audits.

(A fellow guest on the WEAA 88.9FM show, Baltimore City Councilwoman Helen Holton, pointed this out in Pratt’s defense.)

“How could we be spending millions of dollars and not have financials?” host Marc Steiner asked, in a flabbergasted tone.

“That’s a question you probably need to ask the Department of Finance,” Pratt said, referring to a department headed by mayoral appointees and held currently by Harry E. Black.

Another guest on the program, Councilman Carl Stokes, wasn’t letting  Pratt off the hook and faulted her for being “too nice” and not demanding departments balance their books every year.

“I love my comptroller,” Stokes said, “but she needs to say she needs financials.”

“We Welcome It”

The program, which also included Councilman Robert Curran and citizen activist Mary Alice Ernish aired as audits legislation moves through the gears of the political process.

At this point, a bill calling for voters to decide whether some (14 of 55) city agencies and departments would be audited once every four years is up for third and final reader before the City Council.

This bill already has been voted down – then watered down – by Council allies of Mayor Rawlings-Blake.

Asked by Ernish her position on the legislation, which is currently on the City Council agenda next Monday, Pratt said: “If the resources are provided to the department of audits, we welcome it.”

Pratt went on to warn that the auditing required under the proposed charter amendment would be costly, which could mean “some cuts, layoffs or services not provided . . . something is going to have to suffer.”

“Our finances are strapped, as is, already,” Holton said, taking up the theme. “So to say you’re going to jump out of the box right away and we’re going to audit 55 agencies in two years is a mammoth task.”

“Other areas are going to suffer,” she warned, citing controversial cuts already made in recent years to city recreation centers, pools and after-school programs.

“Something has to give!” Curran chimed in.

Stokes once again provided the note of skepticism, observing that doing an audit every four years “is almost akin to not doing any audits at all.”

“People can steal very easily over that four-year period,” he said.

Ernish v. Pratt

The frostiest moments, however, came when Ernish challenged various Pratt assertions – including the Comptroller’s contention that her office has suffered from budget cuts and the difficulty of hiring auditors away from federal, state and private sector jobs.

Baltimore’s audit department is “actually amazingly well-staffed,” compared to other cities, Ernish observed.

“For you to say we’re top-heavy or overstaffed … that is absolutely not true,” answered Pratt, who had earlier complained that in her 2013 budget she had only been given 39 of the 42 auditor positions she requested.

Houston has 11 full-time auditors, San Diego has 18, San Jose 10, Jacksonville … has 16, Indianapolis 9, Charlotte N.C. 8, Detroit has 11 … El Paso 8, Memphis 9, Seattle 8 and Denver 21, said Ernish, founder of the non-partisan group Audit Baltimore.

“Not Finished Yet”

But Pratt argued that some other challenging special circumstances make it unfair to compare Baltimore to those cities.

“Are these cities that you’re talking about …restating their CAFRA?” Pratt shot back at Ernish.

As The Brew reported in December, because of an error made by the Department of Finance under previous director, Ed Gallagher, the city is having to redo its 2010 and 2011 Comprehensive Annual Financial Report (CAFR).

Fixing that document, which is used by rating agencies to determine the city’s credit rating,  has been costly. Pratt noted (as the earlier Brew reporting states) that the city is spending approximately $700,000 to hire KPMG and Ernst & Young to correct the problem.

Fixing it has also taken the auditors, as well as Finance staff, away from their regular duties, Pratt said.

“We’ve spent over $700,000 with these outside firms,” she said, “and it’s not over yet.”

Go Slow Approach

Ernish said she does not support the current legislation (“it looks like no other city charter”) and suggested citizens petition to place a more effective measure before voters.

But the other guests said the legislation should be passed, as “a good start” or, in Stokes’ case, “better than nothing.”

“The journey of a thousand miles,” Pratt intoned, “begins with a single step.”

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  • Kim Trueheart

    It’s called QuickBooks, purchase a site license and for more fidelity buy QuickBooks Pro!!!

    • Bmorepanic

      I think its called Blackbaud, but agree with the sentiment.

  • Barnadine_the_Pirate

    Step one — fire Pratt, who by her own admission is incapable of doing her job.

  • Edfitz

    Let me get this straight…Pratt and SBR have been in major city positions for how long and now the city fiances practices are in questions and need to have audits !!  Where have these two city “leaders”  been since the turn of the century ????

  • Missing Link

    It is amazing Kim Trueheart! The thought of actually showing
    the citizens that every dime is accounted go figure! Who are these tax paying
    citizens and who do we think we are!

  • ConnellHyde

    1. Stokes has caved, what a surprise; 2. recent $700k CAFR mistake hardly accounts for lack of internal audits over last 30 years; 3. get that petition up and running, I’d sign it; 4. if nothing else, at least we now have a new marketing slogan for the city, dreamed up by our very own Council members: “Baltimore — Better than Nothing”.

  • http://twitter.com/bosconet p johnson

    Pratt should compete against the Feds and State with more responsibility for junior members of her staff. They might not stay around 20 years but for as long as they do they will be hungry beefing up the resume for a better job. As a bonus, the tax payers won’t have to pay them any/very little pension benefits…..

  • Melissa

    Call me naive but shouldn’t the restated CAFR be relatively moot? If I produce a work product in error, I don’t have a luxury of a work stoppage or slowdown to compensate. I still have to fulfill my duties as a professional employee (ie no overtime, though comp time accrues) which means I work overtime to complete the tasks at hand.

    Of course a single employee isn’t exactly analogous to a city department or agency. But couldn’t the comptroller require her staff to participate in the CAFR restatement and begin collecting (or even training other agencies to collect) financial data that would be required as part of an audit? I don’t see the restatement and audits as mutually exclusive tasks.

    Even if the workload for the restatement is so demanding as to make it impossible to begin audits, then wouldn’t the 2014 audit start date allow enough to complete the restatements?

  • MICKEY 111

    LOL…THEY  ALL COVER  FOR  ONE  ANOTHER….CK  ALL  THE  BANK  ACCOUNTS  AND  THEIR  ASSETS….HMMMM…WHO  DARES  TO  DO  THAT  AND  UPSET   THE  APPLE   CART…LOL….

  • DARENMUHAMMAD

    NOW WHERE WAS THE DO GOOD WHITE LIBERALS LIKE ENISH,DELAPORTE AND OTHERS WHEN O’MALLEY AND REGIME WERE IN POWER DEMANDING A EXTENSIVE AUDIT?

    • Cwals99

      These audits will show not so much criminal activity on the part of elected officials as much as the developers and contractors that drive the corruption.  Whereas the city’s politicians work in a larger, disfunctional movement of money by the powerbrokers…..I can assure you they are white and rich……they are often a victim of this money game.  Correcting the fraud and corruption may actually free some council members to serve their constituents rather than remained chained to developers.

      • Mickey 111

        i would  like  to  assure  you  that  they  are  white  and   BLACK  and  rich

  • Westside resident

    Many city departments receive state and federal aid which require extensive accounting for how the funds are used/disbursed. I fail to see why these same agencies cannot produce a budget or account statement on a yearly basis.

  • Cwals99

    The Comptroller’s Office stated when pressed that the camera in the Board of Estimates meeting room will be online and on TV within a month…..it is important that the public watches these meetings and that the underserved have access to the cable station.  O’Malley made a deal with Comcast that included subsidized cable rates to allow them to access Public Access Channel and we want Comcast and the city to advertise this low cable rate to get everyone ready to monitor our elected officials.

  • jimmy mcgee

    after Dixon you would think blake would have demanded a complete audit of EVERYTHING as she took over. Not too bright! I would have determined it more important than wasting millions on a poorly thought out car race.

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