Inside City Hall
Inside City Hall: Any light at the end of the audit tunnel?
Not really. With little sense of urgency, the resolution of the lone audit at Rec and Parks drags on.
Above: Straightening out the books of just one agency has taken 20 months and counting.
Verifying “the books” of Baltimore government, whose main agencies and boards haven’t been independently audited for so long that nobody remembers when, is neither quick nor easy nor welcome by the powers-that-be.
The Department of Finance has revenue and expenditure accounts that it uses to meet the payroll and disperse funds to contractors and consultants. But those accounts don’t necessarily jibe with the numbers followed by the departments.
And the “big-picture” annual budget, which currently looks good to bond-rating agencies, takes on various shape-shifting during the fiscal year as supplemental funds are approved, “unexpected” revenues are discovered, and state and federal grants are mixed into the pot.
Then the whole process starts again, with discrepancies and errors from one year passed onto the new budget – as the city itself noted itself in a detailed Bureau of the Budget study that was ignored as soon as it came out (here and here).
And that was before the feds demanded $3.7 million back in improperly handled homeless funds.
The bottom line of city finances should be how well an individual department knows at any given time what’s going in and out of its coffers.
Thus far, we’ve had one test of that standard. It hasn’t been pretty. Back in December 2012, Recreation and Parks became the first agency to be audited under legislation pushed by Councilman Carl Stokes, watered down by the Rawlings-Blake administration and approved as a charter amendment by voters.
The auditor found errors, inconsistencies and poor practices to such a degree that it took 1½ years to unravel the mistakes. Among them: undocumented time sheets, inter-agency billings that didn’t add up, and cash at rec centers (much of it paid by parents for kids’ programs) not properly accounted for.
Rec and Parks promised to reform its ways and get back to the Board of Estimates with a progress report due today.
Except that it hasn’t met the deadline. Instead, Rec and Parks and the Department of Finance are asking the board today for a 90-day extension “to resolve and report on their resolution of Audits’ findings.”
The board is expected to grant the extension, while at the same time approve $133,400 in general funds to hire Results Leadership Group LLC.
They are a Rockville consultancy that will polish up next year’s printed budget with a strategic planning process dubbed “Turn the Curves” that will supplement the $1.5 million given to Philadelphia-based PFM to advise the mayor on her 10-year financial plan.
Coming up on the third year since voters overwhelmingly approved the audit charter amendment, we’re faced with the prospect of 12 more agencies yet to undergo an accounting (including Police and Public Works many times bigger than Rec and Parks) by an administration more successful at making future plans and promises than in correcting present-day mistakes.
If the audit process were analogous to a train in tunnel, one could say there’s still no light in sight.