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Lack of audits “neither here nor there,” mayor says

Rawlings-Blake says City Comptroller Pratt fails in her duty to conduct agency audits.

audit

Photo by: praxity.com

WYPR’s Sheilah Kast today interviewed Mayor Stephanie Rawlings-Blake live and was able to question the mayor (free of prepared statements) about the controversial 10-year report she had commissioned from Public Financial Management (PFM).

Why, Kast asked, was the report necessary in the first place? “Because we wanted to make sure we had nationally recognized financial experts that had the experience working with cities to right their financial ship,” the mayor answered.

Asked why the city couldn’t have done the analysis in-house and saved more than half a million dollars, Rawlings-Blake said the report has been effective and worth the cost.

Due to the recommendations from the Philadelphia-based company, she said, the city has “saved more than $20 million before we even went to print with the report.”

(This is apparently a reference to statements by City Budget Director Andrew Kleine in The Sun. He told them that, on PFM’s recommendation, the city overhauled municipal health care “and, on January 1, switched to a system that charges lower up-front premiums but higher out-of-pocket costs” and that “as a result, the city expects to save $10 million in health care costs this fiscal year and $20 million next year.”)

“I think people would agree that . . . it is an incredible amount of savings,” Rawlings-Blake said, during Kast’s morning news and culture show, aired weekdays on 88.1FM.

What About Audits?

“I was surprised to hear so many city agencies haven’t been audited in years,” Kast continued. “How do you know the actual situation described in the report is accurate?”

“This is a financial report based on expenditures as well as the financial forecast for the nation and the city. So the fact that the comptroller has not audited some of the departments is neither here nor there,” Rawlings-Blake said, apparently arguing that the lack of audits is both unimportant and the fault of City Comptroller Joan Pratt.

Kast pressed on, asking: so you don’t think audits would produce more accurate numbers?

“I’ve been working with the [City] Council in encouraging the comptroller to fulfill her obligation per the charter and audit city agencies. For years, this is something that I’ve been talking about since I have been on the Council,” Rawlings-Blake said.

Pensions and Unhealthy City Employees

Kast asked lots of good questions that have arisen since the mayor aired a summary of the report, with its dire forecast of Baltimore’s finances, on February 6:

Under changes in the pension system, would new employees only have a 401K plan? “Yes,” the mayor said.

Don’t 401K’s shift the risk to the employee? “It’s an educated risk,” she replied.

City employees might say, “Hey, I didn’t sign up for that!” But the mayor said she’d respond, “You signed up for an unsustainable plan that the city can’t afford.”

Listen to the interview to hear her full answers to these questions and discussion of the costly health problems of city employees, the progress so far on the “Vacants to Value” program, the apparently accidental shooting of a police trainee and more.

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  • AuthorShereeseM

    “the city overhauled municipal health care “and, on Jan. 1, switched to a system that charges lower up-front premiums but higher out-of-pocket costs” Whose out-of pocket costs? Come on! Let me get this straight, a non-local company was paid half a million to tell the city’s leaders to cluster-f__k its citizens into the poor-house? Surely a local company could have made the same recommendations for a fraction of the cost. And more Pratt v. Rawlings-Blake girl fighting? Someone needs to put these witches in their places, meow!

    • bmorepanic

      Naw, they paid half a mill to cluster-f_k the city’s employees primarily and its citizens secondarily.  I could have told them to do that for $20 and a cup of coffee.

      Last 30 years, same goal, every mayor.  The only new thing SRB has is the free tickets love affair.  

  • trueheart4life

    Did you hear the young lady call this $500,000 Philly-thingy her “Aspirational Vision” for Baltimore? … Don’t sound like NO plan to me either Mayor Rawlings-Blake ~ I’m with you, lets call it your 10-Year Aspirational Vision and be done with all this debate, ok???  No plan, No goals, No objectives, No measures of effectiveness … It’s just a simple 10-Year Aspirational Vision ya’ll.

  • William Hudson

    Of course audits are “neither here nor there”, thats why Fortune 500 companies conduct them annually as well as most government agencies – except in Baltimore.  And look how good Baltimore is doing.

  • ushanellore

    I can’t believe the Philly company made so much money to tell SRB the city employees should be put on a lean and mean health plan with more out of pocket co-pays and higher deductibles.  Individuals are resorting to that with commercial insurance behemoths because that is the only way out for them.  That is the only affordable choice for those who purchase group insurance for their small businesses. 

    Absolutely incredible that SRB is so disconnected that she could not see this herself.  I think she got this expensive company to buttress her edicts.  She needed an expert scapegoat to blame and reduce the backlash from the city employees. 

    Every city’s various departments need auditors to reduce corruption, to make sure monies received are recorded and spent properly, to detect waste and favoritism in bid purchases, to look for embezzlement, to make sure citizens are billed appropriately and to expose financial cabals out to fleece innocent citizens, among the ranks of the city employees. 

    Assuming everyone is honest, efficient and competent in a city’s departments is the equivalent of inviting a kleptocrat to your house and giving him free rein.  The casual dismissal of this important issue reflects poorly on SRB.  It tells me she underestimates the intelligence of Baltimore’s citizens and she does not think the electorate’s opinion will influence any political outcomes for her. 

    Without proper and frequent audits, what is the protection Baltimore’s citizens have against being bamboozled by the bureaucracy?

  • Barnadine_the_Pirate

    While it is amusing (in a bitter way) to see R-B pretend that she didn’t oppose the audits herself, I think she has a point — wasn’t it Pratt’s job to see that they got done WITHOUT charter amendments and bills and referenda?

  • discer

    All you SRB haters need to come up with a plan if you think you can. All I hear is bitching with no solutions beyond audits. Most major metro areas are suffring in the current economic state. However, if memory serves I believe Baltimore still reatins a AAA bond rating. Must be doing something right. Not that that is ever recognized.

    • Gerald Neily

      Discer, you apparently don’t read or agree with much of anything written in The Brew. Instead of just criticizing the readers, please address your criticisms first specifically at the content of the Brew articles, which is our common ground.

    • trueheart4life

      “Discer” – Baltimore has NEVER, EVER held a AAA bond rating.  It is currently Aa2 with Moody’s and AA with S&P … Do your home work!!! Oh I forgot, gotta get a brain for that, right???  Note that our Mayor has repeatedly stated that the current rating is in jeopardy because of our problematic water billing system … So “doing something right” is only a figment of your wild imagination!!!

  • axbca

    As of this moment the city’s Finance Department has not been able to assemble the financial information required by the City Auditor to audit the Department of Recreation and Parks, thus no engagement to audit the department by the auditor has occurred. 

    That audit was directed to be undertaken last June, at the behest of the Mayor, and in writing to the Comptroller. The Deputy Finance officer promised that all of the documentation would be given to the Auditor on December 31st, “date certain”. 

    Still it all lingers, and the fact is that the Finance Department is incompetent and can’t produce the documentation required to begin the audit, though the word in City Hall is that the matter might be resolved before March 4th. 

    This stalemate caused by not having on hand the documents required to be audited is, in itself, a reason to think the city’s in-house financial records are in shambles. In a mature city, there would be council oversight hearings, and resignations would be forthcoming. Not in Baltimore.

    The ten year plan for Growth can honestly only be termed a vision for the future, with many good, worthy pieces to it. It can only be a vision, not a plan. because it has no grounding in facts based on impartial investigation by a creditable Comptroller or Auditor,—agency audits. Those are the documents that disclose misspent funds, outstanding receivables, open purchase orders, un-obligated funds, reserves, accessory accounts, and the like. 

    Audits are the intervention documents, or “papers” that the government willingly serves on itself, routinely, comprehensively and in a timely manner so the reality of the status quo of the fiscal affairs of a government can be clearly understood by officials and citizens alike. 

    Without these documents—financial audits that cannot be impeached for reasons of incompleteness or misrepresentations—the city cannot fashion an end game for itself, even one year to the next, much less for ten years. 

    It is a city that willfully plays the “unknown float”. 

    The record in Baltimore bears out this assertion: our city can’t make grand or even small plans—plans that have wide support and understanding by the citizens—because they seemingly exhibit no thoroughness, no specifics, and of course no checks and balances to keep the city from even the appearance of a major misadventure, the car race being an example. 

    (It should be noted that the city did not want to conduct a thorough audit of the last event, only to be immediately turned around by the business person hired to make it work who made it clear an audit had to be done to establish a firm baseline for building a business plan for a succeeding year(s); after all how could you expect that person to attract a title sponsor if he did not have uncontested documentation of ticket sales, attendance and other essential verifiable documents necessary to bring in a title sponsor.)

    Symptoms of this mess-a-go-around in which the city persists are frequent blow and dust ups of major and minor distractions, be it water bills or speed cameras, or even, all of the disappearance of the money given to the city by the federal government to serve the homeless These recurring, seemingly, unceasing events, drip-drip on the spirits of the citizens and cause them to have very little faith in the leadership of the city government.

    The real plan for Growth of Baltimore would be for the resurrection of the moral imperative of accounting for the billions of dollars spent in this city for many decades now. Where did the money go?

    For there to be a plan, there must be a start point. The audits of the city’s 55 boards, agencies, commissions and departments have not been audited for years.  Everyone admits to that.  Every sensible person who makes that family budget and holds a bank account, knows the monthly bank statement is the take off document for sharpening the pencil to allocate funds for the next month.

    The only people in the city who do not want to deal with the fiscal realities of the city are the very people entrusted, by oath, with operating the city  

    That is the record.

    Chris T. Delaporte
    The Park Advocate

  • cwals99

    There is no doubt blame coming to the Office of Comptroller for Baltimore’s reputation for fraud and corruption but the biggest driver of all of this is the failure to fund agencies charged with oversight and prosecution. All one has to do is look at the funding for the comptroller’s office and for the city attorney’s office and you will see there is no way these agencies can even build a proper oversight mechanism.  Where does the funding come?  City Council and Mayor Rawlings-Blake.  Since the mayor has an extraordinary amount of say on budget issues……the buck stops there!!

    The mayor’s development funding, which is of course only what she is told to do by Johns Hopkins and Maryland’s 1%, is designed to drain government coffers and further lessen the ability to staff these oversight agencies…..do you think there is a connection to massive indebtedness and massive fraud and corruption?

  • Matthew Riesner

    No financial oversight and loosing more businesses…Welcome to the people republic of Rawlings-Blake. We don’t know if the city is broke or not and just today Ed Hale decided to move all of his business dealings out of the city to the county because he believes that he is getting ignored by the current city administration…if he is getting the cold shoulder, how many other job creating people are as well?

  • William Hudson

    Will the 10 million in savings this year and 20 million next year from SRB’s ”reforming” (making employees pay more) healthcare be refunded to the taxpayer? Or will it be spent by the big spenders and small oversighters in City Hall.

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