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Accountabilityby Brew Editors3:31 pmFeb 26, 20130

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

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

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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