And what does the City Manager manage?

Maybe they don’t teach basic accounting in City Manager school? Please note, this isn’t about our current City Manager, but our last one- Jim Dineen. The one we let double-dip because he was “so good”- except the only money he was keeping track of was his own.

This is inexcusable-

State audit finds Dayton didn’t properly track $32M – Dayton Business Journal:
A belatedly-released 2005 audit of the city of Dayton showed the city didn’t keep track of how $32 million in federal grant money was spent.

The state audit office, which released its findings Tuesday, also found the city was careless in handling some accounts and payroll procedures.

The city of Dayton is expected to respond to the auditor’s report at a press conference at 3:30 Tuesday afternoon.

Instead of keeping track of federal grant money expenditures in one place, the city relied on individual department heads to track how $32.3 million was spent, according to a release issued by the state auditor’s office.

It took the city several months to round up a document that showed how all of the federal grant monies were received and spent, said Steve Faulkner, spokesman for the auditor’s office. That’s what caused the delay, he said.

“It should have been easy for them to have pulled off a list of expenditures from their main accounting system,” Faulkner said.

And when the city did produce that document, balances there didn’t match the balances the department heads kept, Faulkner said.

Other accounting practices also caused problems, according to the release:

  • Deposits that were made into the general fund didn’t have supporting documentation that showed why certain funds went where they did.
  • The municipal court is supposed to transfer money to the city each month, but it didn’t happen, which caused an overage in its account by $37,000.
  • Residents’ payments of water, sewage, storm water and other fees all went directly into the water department’s account, which divvied up the funds to the respective departments afterward. Doing it that way provides no assurance that the right funds are getting to the right departments, Faulkner said.
  • On top of that, some residents were overcharged in storm water bills, and corrections only were made when residents complained. Faulkner said the auditor’s office did not have an estimate on how much residents were overcharged.

We may want to look at our Clerk of Courts, Mark Owen (Chair of the Montgomery County Democratic Party) and see what his excuse was for not transferring funds?

I’ve always wondered about the “Blanket PO” process the City uses to budget for purchases- it seemed awfully sloppy. Maybe it’s not the Dayton Public Schools that needs an audit after all?

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13 Responses

  1. D. Greene July 24, 2007 / 5:33 pm
    I for one am not surprised at all, only saddened.
  2. D. Greene July 24, 2007 / 5:48 pm
    Oh, and David, did you notice that when the article originally posted, there was a comments section? That got taken down within the first hour so of the story being posted. I think I know why.

    The DP&L story has been utterly buried by the local media. I expect the same thing will happen with this story. If there was serious fraud involved, it should be uncovered. I doubt highly that this money is just sitting in some bank account somewhere. It has been spent, and somebody has gotten paid.

  3. gene July 24, 2007 / 5:48 pm
    Who is directly responsible for holding these people accountable? The Public? I am also not suprised, I am also saddened, and WE ALL should be pissed off.
  4. D. Greene July 24, 2007 / 5:48 pm
    (when the article was originally posted on the Dayton Daily News website, I mean)
  5. David Esrati July 24, 2007 / 6:04 pm

    D. Greene- this story was from the Dayton Business Journal site.
    I haven’t looked at the DDN yet.

  6. Jeff July 24, 2007 / 9:01 pm
    The DDN article did have a comments section, with the predictable slams against Rhine McLin (who I’m starting to believe is just a whipping boy for a lot of local ills)

    I posted at the comments section that the responsibility for lax financial managment really lies at the level of city manager and department head, which would mean Rashad Young and Jim Dinneen, and probably whoever is in charge of city accounting and financial management

    David here makes pretty much the same observation, though I’m not prepared to give Young a pass and pin the tail just on Dinneen.

    And, again, this is a good example of how the local politcal system permits the avoidance of accountability…blame it on a past city manager, or the current one, but what about governance from the city commission ? (not just McLin, who isn’t really a mayor the way Ritchie is a mayor or sam Alioto was a mayor)

  7. D. Greene July 24, 2007 / 10:43 pm
    Young has come out guns blazing, defending the City’s audit practices, but at first blush I don’t think his arguments will stand up to scrutiny. I will have to read this more carefully tomorrow.
  8. Skeptic July 25, 2007 / 11:12 am
    I’d like to point out that there are NO allegations of mis-spent funds or actual fraud. We’re taking about poor tracking and accounting. Yes, its a problem but not a crime.

    As someone with experience in going after grant money, I can tell you that part the problem is that every level of government uses a different system for grants and has different reporting requirements. It is difficult for even the best and brightest to keep track of it all, much less a City that has cut hundreds of positions over the last five years.

    Clearly, this needs to be addressed but it is not worth getting upset about. I think the press needed something to sell papers this week.

  9. David Esrati July 25, 2007 / 12:46 pm

    I agree with Skeptic- no allegations of missing funds- but, the whole point of accounting is tracking money- and being accountable. If it’s this difficult to track this money- it means the system is probably not able to give us other financial data that would be helpful.

  10. Jeff July 25, 2007 / 3:50 pm
    Has anyone read the audit.?t is online at the DDN website.

    As to the Federal money, apparently this is supposed to be a standardized report

    “Finding Number 05-05
    Schedule of Expenditures of Federal Awards

    Criteria – OMB Circular A-133 requires recipients of Federal awards with expenditures of $500,000 or more annually to prepare a Schedule of Expenditures of Federal Awards and provide it to the single auditor. The schedule should show the name of the program, the Catalog of Federal Domestic Assistance number, the Federal agency, and the federal expenditures by program. For Federal awards received as a sub recipient, the name of the pass through entity and identifying number assigned by the pass-through entity shall be included.”

    …and based on this language, this is a repeat finding, or this problem as surfaced before:

    “Condition – As reported in prior years, the procedures utilized to prepare the City’s Schedule of Expenditures of Federal Awards were inadequate. ”

    And the idea that there was no real problem involved is not true, based on the citys response,which is included in the audit report.

    “In an effort to ensure the integrity of the Federal Schedule, the City of Dayton began an emergency in-depth procedural analysis of all federally funded programs in the Banner Financial System for 2005.”

    The words “emergency in-depth procedural analyses” sounds to me they recognized they had internal issues that would cause them to fail the audit, thus it became “emergency”. The auditors did say the corrective actions should make things right, (but had an additional recommendation for written procedures:

    “Auditor’s Response to City’s Comments:
    The City’s plans for compiling the Federal Schedule should alleviate the problem discussed in the finding. However, we suggest that the City put its new procedure in writing and share it with all the federal grant managers.”

    @@@@@

    Is it a big deal? Yeah, it could be if the city doesnt follow through and just blows off this audit. The wording that this tracking of Federal funds has apparently been a recurring issue should raise an eyebrow or two.

    The purpose of audits are not just to find fraud, but to make sure that the entity being audited has proper controls and procedures in place so there isnt any opportunity for fraud…..which is what they were gigging Dayton on.

  11. David Esrati July 25, 2007 / 5:11 pm

    Hi Jeff- I didn’t read it- but yes, I knew they had been warned for 3 years- and that’s why this escalated. It’s kind of amazing that after 3 years- they still didn’t have an answer for the feds. Sort of asking for a spanking.

  12. Sandy Walters August 23, 2007 / 8:33 pm
    Would like to hear from anyone who can give me some info about Jim Dinneen’s tenure as Dayton city manager. I need to be educated about his methods because he’s now here in FL spreading his “charms” around.
    I noted a comment in dayton city commission minutes from 2005 that noted he did not have a spotless record. What’s that about?

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