Financial watchdog John Marshall Lee, in his latest OIB commentary, raises a series of questions about city bean counters’ financial accountability.
School doors will once again open in Bridgeport in less than four weeks. Just a reminder that 13 months ago the elected Board of Education (BOE) in a majority vote decided to close down and let State BOE rules take over. Financially that Board never reached a vote on a financial plan for the 2011-12 school year leaving the school system opening one year ago with an anticipated $12-15 Million deficit. Many were routinely irate over the failure of stewardship, unanswered questions and fiscal accountability.
By January the former Superintendent was history and a State appointed BOE hired Paul Vallas to take charge of necessary changes. The new Superintendent and his team worked on a “school based budgeting model” and a “five year fiscal plan” to fund education reform in Bridgeport. One of his promises in creating necessary reform in Bridgeport was to eliminate the initial $15 Million projected deficit, in other words, to reach June 30, 2012 with a balanced budget. How would the public know whether the BOE (or the City in general) ended the year with a balanced budget? Practically speaking any person interested should be able to look at the June monthly financial report for any year and see 12 months of expenditures, revenues and variances (as the Mayor is directed to present by the City Charter) to get the answer.
However, for more than two decades that June monthly report to close out a City fiscal year has been unavailable to the public. This year the report was issued and became available in the City Clerk office by July 31. That is positive. It is the second “monthly financial report” prepared by the new City “acting Finance Director” and the format, presentation, and even the accuracy of the summaries are open to question. That is not positive and has already created confusion in the Budget and Appropriations Committee. (For instance there is a declaration on the June report cover: “This report is not final–Draft only. Report will not be final until all Y/E entries are entered and audit is complete.”) Please explain the warnings. Of what practical value to anyone is the report without the ability to compare it to a previous year and not to an audit six months hence that provides no line item detail?
Can we believe there is a year end City surplus of $259,967? How important is this to the taxpayer or to economic development in the City? In January and February the City was projecting a $3.8 Million deficit (under the former acting Finance Director). Then there was no financial report provided by the Mayor for March or April as the Charter prescribes. Finally, the May report (incorporating March and April results) appeared with a projection of $2,690,000 year end deficit. What happened in a 30-day period to turn the situation around and create a surplus? Or are monthly reports routinely askew or inaccurate in looking at variance of revenues or expense from budget so that numerical results are not to be trusted? And no narrative variance reports have been available with the numbers since February!
So the full annual report for 2012 shows a surplus of $259,967? How accurate for informing a taxpayer as to what is really happening? The Mayor has not trumpeted that info as he did last year at an election debate. That is a major crux of City failure to be accountable around BOE reporting. There are many questions about BOE recent expenses, contracts, bidding process, etc., but how can a taxpayer look at the City monthly financial report for information? The January 2012 monthly report used 278 line item listings, under 38 department headings below three major expense categories: Board of Education, Nutrition Center, and BOE Debt Service to provide line item detail of expenses. The June 2012 monthly report eliminated all above detail and showed only Budgeted and Expended: BOE General Fund $215,843,895; Nutrition Center $11,718,572; BOE Debt Service $15,664,675. The modified expense budget exactly equals the amount expended for 12 months! Imagine that? Where is the detail to answer the questions being raised, to compare and contrast? How can you understand a result with absolutely no detail and showing zero variance? Possibly:
• The City and BOE are not talking to each other, so detail is not available? (That has happened before.)
• The City MUNIS accounting system and BOE formats with a new Superintendent have not been coordinated? (Unlikely, because the State uses MUNIS also and is very interested in reporting, right?)
• The new acting Finance Director believes that “less is more” in terms of public reporting? (If the devil is in the detail, let the devil stay in hell, instead of causing the public to question, which is public hell?)
• But perhaps you have a better guess? (Actually the schools indicate a late August report will confirm the 2011-12 budget balancing with details! 8-6-12)
Budget Oversight Bridgeport (BOB) reported in 2011 that over $4 Million of ghost positions were included in that budget with benefit expenses in addition. When the City failed to fund those positions, they spent the money elsewhere, and the public does not know where. (BOB will attempt to review that in a later report.) However, in a nearly half billion dollar budget where the BOE portion ($242 Million ignoring grant spending) almost equals the City side spending of $253 Million and the public gets merely three lines of information, the public is entitled to ask lots of questions. If public attention is necessary to avoid fiscal disorder and understand deficits, City and BOE accountability are paramount and must improve.
Will the elected officials who spend the money be more accountable to the taxpayers? Will they be open and discuss fiscal changes and reporting anomalies in open meetings with answers? Will they put reports and records on financial details presented in public hearings and meetings in the City Clerk office for examination routinely? These practices are not current and systematic. If the Mayor wants to be accused of being accountable, he has a long road to travel to get there. It is a demanding concept and word. Time will tell.
*** Don’t count on any real BOE budget changes or public info ’til 2013 according to the Mayan Calendar, no? And maybe by then we won’t be stressing it any longer! *** BACK TO THE FUTURE! ***
I was hoping Vallas would be different than the people who formerly led the BOE. I am beginning to think that is not the case. I read that 12th-month report and looked at all the numbers and nowhere can I find where the deficit 12 million plus dollars was taken care of. We were told it was but it’s not in black and white.
Vallas in fact got rid of a few administrators but then broughi on board more of his cronies who are costing us a million dollars more than the ones who were let go.
Then we hear Vallas has given out a ton of contracts with no competitive bidding; he has to know this is illegal. It so happens many of these awards are to companies that have worked with him in the past.
The so-called saviors of the educational system (the state-appointed BOE) have turned into nothing more than a rubber stamp for Vallas. They have done nothing but nod their heads in agreement with anything he wants.
Somewhere in the back of my mind I have a feeling when all is said and done the kids of Bridgeport are going to get screwed yet again. I hope I am wrong.
“I only know what I read in the papers.”
Well, a common complaint at OIB is the papers do not cover events the way we seem to remember they did in the past. Such an EVENT is the printing of the June 2012 Bridgeport Monthly Financial Report. A June monthly closing report has not been prepared since the time of the Financial Review Board more than 20 years ago according to Tom Sherwood!
So on one level the printing of this report should be an event (even though it has been a Charter duty of the Mayor for many years, ignored regularly). But the Mayor has said nothing about the $259,000 surplus in terms of a press release. Why not? The CT Post has not picked up on the report showing up either, kind of like Rip van Winkle after a long sleep.
Who might look at it and review it as part of their oversight duty? Ordinarily you would expect the City Council B&A committee. But they are having messages sent out today that leave us wondering whether a meeting is scheduled or has been canceled for next Monday evening solely to review the monthly financial report … June 2012 or July 2012, one cannot tell.
Can you imagine, there has been no effective fiscal oversight in terms of analysis by B&A for months now. If you do not believe me, look at the minutes of their regular non-budget-review meetings. And they have not sought effective outside training or assistance for years either. Fiscal review, analysis and commentary is not practiced in this City by the only check and balance group given the Charter power to do this. Yet they have the funds to get help, and they have the power to ask for changes in reporting.
So why not? What is the problem? You need to ask the B&A members for their own answers. I cannot get a satisfactory response to the factual questions, alternatives and suggestions I routinely have been making for over two years now.
Anne Kelly-Lenz is the new Acting Director of Finance for the City for the past several months. She appears to have a record of innovation, accomplishment and good personnel management in Bridgeport’s Tax Collection office as well as good experience in the private financial sector before getting into municipal administration. That is to the positive for sure. She may provide an opportunity for the monthly report to become more relevant, accurate and reader friendly for those who choose to review City behavior by the numbers especially the Budget and Appropriations members.
It is clear much of the frustration, distraction and ultimate destruction of our previous BOE was caused by an institutional inability to provide regular, accurate, comprehensive and reader-friendly information. There should be no excuse for such behavior today.
Inasmuch as it takes a little longer to close out the final month for an annual fiscal report because of adjustments and final entries before the City delivers the books to the external auditors, be aware the City has initially listed a SURPLUS. Good news, but perhaps not accurate. The Library Department has had monies held back from delivery to them for a second year for instance. The sum withheld by the City according to the report by itself creates the surplus. Otherwise a DEFICIT would be reported. And no one wants to talk about a DEFICIT, right? By month’s end, we should see BOE details, and perhaps a re-reporting of the City’s adjusted year-end June 2012 report? And if the BOE did balance the budget and close a $12-15 Million gap in six months, that will be very good news, right? And the line items will provide details as to how this was accomplished through increased revenue? And/or reduced expenses? Right? Then accountability will be a fact rather than a promise, and that will be good. Time will tell.
*** It’s not worth the paper it’s printed on! ***