The B.S. Task Force
Jun. 22, 2018
Earlier this week, after penning a classic case of blame-the-messenger defensiveness in the pages of the Inquirer that attacked Metropolis Controller Rebecca Rhynhart'due south recent study showing the city of Philadelphia leads the nation in the mishandling of taxpayer money, ( Nosotros're Number One! ), Mayor Kenney called a printing conference to announce that he was creating a "Resolution Task Force" to accost the event. And he promptly appointed a bunch of his cronies to it, along with the very people who, uh, kinda helped to create the problem in the showtime identify. Welcome to reform, Kenney-manner. How Putin-similar was Kenney'southward move? The papers didn't even cover his printing briefing, no incertitude seeing information technology as spin—not news.
Now, the in a higher place might sound similar a pretty loaded commencement paragraph, but information technology'southward actually the nigh accurate I could come with. Since late April, when Councilman Allan Domb'southward cross-examinations of befuddled Finance Director Rob Dubow and Treasurer Rasheia Johnson revealed the metropolis's accounting woes—the missing $33 million, the millions in unreconciled accounts, the $924 million in accounting errors Rhynhart unearthed—we've been treated to one-half-truths, stammering obfuscations and stunning examples of incompetence. Through it all, when the Mayor hasn't been silent, he's been thin-skinned, telling one Tv set reporter when questioned about the missing $33 million from the metropolis'southward consolidated cash account: "Reconciling is not missing." But paperwork, correct? Trouble is, it's at present half dozen weeks afterwards and if your answer to the question "where's the money?" is still "I don't know"…guess what? It's missing .
Kenney remained silent while his deputies tripped over Domb'southward questions during Council hearings. Now, later Rhynhart's devastating study, he's come up out of his trounce, attacking her in the op-ed and announcing this sham of a job force. Allow's walk through both.
Mayor Kenney appointed a agglomeration of his cronies to the Task Force, along with the very people who, uh, kinda helped created the problem in the first place. Welcome to reform, Kenney-mode.
Showtime, the op-ed. Kenney zeroes in on Rhynhart'south finding of $924 million in accounting errors and accuses her of "recklessly" inflating that number. He argues that that figure comes from an earlier draft of the city's Comprehensive Annual Finance Report or CAFR; in the back and along between the urban center and the controller'south office leading up to the terminal CAFR report, Kenney points out, all of those errors had been corrected. Rhynhart's argument is that the urban center shouldn't rely on her—the auditor—to get its bookkeeping right. She should be finding mistakes at the margins, she says, only not nearly $1 billion worth.
Who's right? I'm no auditor, but information technology wasn't hard to find the dude who pretty much invented the very notion of municipal finance. He'south correct in our backyard. Ed DeSeve is a Philadelphian, and a legend. He was the city'southward finance managing director under Mayor Nib Green and went on to institute Public Fiscal Management, the visitor that is the gold standard for municipal finance. (It was PFM that authored Ed Rendell'due south financial plan that brought the metropolis back from the brink of bankruptcy in the early '90s). DeSeve has been the CFO of HUD under President Clinton, the federal controller from 1995-1999, and was Special Counselor to the President for Recovery Implementation back when Barack Obama passed something called the Recovery Human activity. It was DeSeve who oversaw its rollout and implementation. An outside audit astonishingly did not take a single critical finding against DeSeve's Recovery Act itself. There may be no better potency on regime and finances on the planet.
"I read Rebecca'southward written report and the city has been sloppy as hell," DeSeve says. "It'southward really inexcusable and could cost the city in the credit market. It'south a blackness marker, merely at this signal, it'due south more of a blackhead than a pimple."
Equally to Kenney's complaint that Rhynhart based her findings on an early draft: " No draft should have $924 one thousand thousand in accounting errors," he says. Indeed, note that Rhynhart's study refers to "bereft oversight leading to $924 one thousand thousand in errors in the grooming of the Comprehensive Annual Financial Report." The emphasis on the word preparation is mine; Rhynhart's finding, in other words, was about the sloppy process—a lack of "internal financial controls" is the accounting term of art—leading up to the final CAFR report Kenney cites.
Which gets usa to the task strength thought. Let'due south put aside the incongruity of it; Kenney's op-ed would have us believe that $924 million in errors is no biggie—merely part of the numbers-crunching procedure—just yet there he is, calling a press briefing and announcing that, despite all appearances until now, he really does take a sense of urgency about our crumbling fiscal house.
So he names a task force—to focus but on the reconciliation consequence. Who's on it? Does he reach out to DeSeve? Nada. What about some individual sector CFOs? Inappreciably. Hell, what about having a taxpayer on it? Yeah, correct. Instead, the co-chairs are Treasurer Rasheia Johnson and former Controller Jonathan Saidel. At present, I dearest Saidel. He may be the funniest political leader I've ever met. But this is not a run at a Borscht Belt hotel nosotros're talking virtually here; Saidel is a Kenney ally and a Democratic party apparatchik who, at the press briefing, dutifully threw some rhetorical barbs Rhynhart'due south way.
As to Kenney's complaint that Rhynhart based her findings on an early on typhoon: " No draft should have $924 meg in accounting errors," says Ed DeSeve, the legendary municipal finance expert.
And how about having Finance Manager Rob Dubow and Treasurer Rasheia Johnson on the task force? They're the ones whose stories about the missing millions and the lack of reconciliation kept changing with every appearance earlier Councilman Domb's insightful questioning. They're investigating themselves. And, if you needed any further proof that this is all for show, they're joined on the panel past Kenney Master of Staff Jane Slusser. It'south as if President Trump appear he was forming a Task Force to get to the lesser of Russian collusion and appointed Devin Nunes, Rudy Giuliani and John Kelly to run it.
Rounding out Kenney's phony Task Force are representatives from the Inspector Full general's office, Council President Darrell Clarke'south Quango staff, and PICA, the state financial oversight lath. Rhynhart, exhibiting a nose for sniffing out political bullshit, declined Kenney's invitation to join them.
Those from the IG, PICA and Council should take joined her in failing. They, like Rhynhart, should be serving as checks on the Mayor; instead, they've been co-opted by him. Particularly disappointing is that PICA Executive Director Harvey Rice is on the console. PICA'southward chairman, Kevin Vaughn, it's worth noting, headed Kenney'south Super PAC.
That said, later on Rhynhart presented her findings to the PICA board earlier this week, Vice Chair Alan Kessler laudably pledged to keep the urban center's fiscal accounting woes on the board'south monthly agenda from at present on. That, combined with a nib passed last week past Domb that requires regular reporting to Quango from Dubow, at to the lowest degree promises some level of oversight moving frontward.
Merely it'due south however hard to cutting through all the spin. The city has ready a website to transparently relate the task forcefulness's work. Sounds like a great idea, right? Except that many of the "facts" in its timeline either self-contradict, run counter to Johnson and Dubow's own testimony, or shade things in a mode that obscures the truth.
Representatives from the Inspector's General role, the state fiscal oversight board PICA and Metropolis Council should take declined to be on the Task Forcefulness. They, like Rhynhart, should be serving as checks on the Mayor; instead, they've been co-opted past him.
In fact, there are so many examples of all 3 that information technology conjures upwardly the "Bullshit Asymmetry Principle," an idea avant-garde by Italian software developer Alberto Brandolini a few years ago, which has taken on new significance in the age of Trump: "The amount of energy needed to abnegate bullshit is an social club of magnitude bigger than to produce it." Then permit'southward just take perhaps the best example: In his op-ed and on the website, Kenney pats himself on the dorsum for hiring "a nationally-recognized bookkeeping business firm" last month to audit the consolidated greenbacks account and presumably notice the missing $33 million. Of course, not mentioned is that most of said national recognition came in the course of an SEC fraud scandal that resulted in the main of the firm, Michael Horsey, losing his accounting license for ii years for engaging in improper conduct. Keen hire!
Clearly, the city'southward current accounting woes were exacerbated by the non-attention shown them by Dubow and Johnson. The assistants'south own timeline on the website shows an unconscionable 10-month delay between the time Johnson constitute out about the missing millions and when Horsey's firm was hired—six months less than Johnson testified to before Domb. That said, Kenney is right that many of these bug predated his election. In fact, by reports from former Controller Alan Butkovitz recommended many of the same fixes—more than personnel, upgrading technology—that Rhynhart does.
It'due south time to concede that the same former fixes aren't cut it. Mayhap what'due south old ought to exist new again. DeSeve took me back to 1980, when, mail service-Frank Rizzo, the city'due south books were a mess. (DeSeve had been Rizzo'southward Budget Manager, just resigned over Rizzo'south fiscal recklessness). He brought in an esteemed outside accounting firm to inspect the city to reassure the financial markets. "I wanted a clean stance," he says. The so-controller didn't like it—that was his turf. "I told him we'll bring in this firm to work with you, you tin can audit behind them," DeSeve recalls.
At present that Kenney has launched a airheaded broadside at Rhynhart and an even sillier impersonation of activity with the Task Force, perhaps we should follow the DeSeve playbook. Bring in a national, respected accounting firm to requite the Kenney administration the in one case-over. Equally DeSeve suggests, they'd likely corroborate Rhynhart'due south findings. "You lot wouldn't have to do it every year," DeSeve says. "Maybe in one case every four years, bring in an exterior audit."
It may exist the best—maybe the only—style to go along the Kenney assistants honest.
Photo via Flickr 
Source: https://thephiladelphiacitizen.org/the-b-s-task-force/
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