What Did They Know? When Did They Know It?- The Philadelphia Citizen
May. 16, 2018
Last Wednesday, at Councilman Allan Domb'south request, City Treasurer Rasheia Johnson appeared earlier Urban center Council for more questioning from him about the city's accounting practices , or—more accurately—the lack thereof. At that place'due south that little matter of the missing millions from the city's consolidated cash account, a now-$27 meg discrepancy between what's on our books and in the account.
Nigh troublingly, under Domb'southward penetrating questioning, there'due south an ever-growing number of accounts that haven't been reconciled in years; by his reckoning, those accounts accept been domicile to $xx billion in taxpayer money. Johnson was accompanied before Domb by Finance Manager Rob Dubow, to whom she reports. Dubow has been in his position for a decade, overlapping two mayoral administrations, a attestation to his within game political skills.
Earlier Domb, he occasionally jumped in during Johnson'due south testimony. At 1 bespeak, Domb cradled his caput in his ain hands and I could merely surmise he was saying to himself: " These are the guys stewarding taxpayer money?" Because what emerges from their exchanges is a grand scale betrayal of the city's fiduciary responsibility to its taxpayer. Watch the carnage for yourself, paying particular attention to the obfuscations and examples of sheer incompetence offered up at the 5:10, 6:25, 9:29 14:53 and 17:48 minute marks:
I've got to hand it to Domb for sitting through Johnson and Dubow's dissembling and keeping his absurd. Watching the display, the number of excuses and discombobulations well-nigh have the effect of numbing your outrage. Almost. But then you call back well-nigh how this administration is seeking even more in taxes while exhibiting such disdain for the taxpayer, and your blood pressure starts to eddy anew.
Every bit the Kenney assistants seeks yet more tax increases, information technology'south clear that a disqualifying lack of intendance has attended the stewarding of those that have already been paid.
Let'due south zippo in on simply a couple of exchanges, and yous tell me if your reaction is anything close to "Wow, these guys know what they're talking about." Johnson testifies that she started in her position in January of 2016, at the first of Kenney'due south term. She establish out about the lack of reconciliations in May:
DOMB: When y'all came in equally Treasurer, knowing that the Treasurer's responsibilities are reconciling the accounts on a monthly basis at least, or even daily, were you doing that when you lot came in as Treasurer?
JOHNSON: Yep. Sabbatum downward, at the fourth dimension in that location was, from transition, there was a deputy that crossed both administrations and nosotros sat down with him and did the debrief, and one of the things was where we were with reconciliations at that time, simply it was not a full-scale disclosure of what was actually happening.
DOMB: My understanding is that the task of the Treasurer is to make certain that all of our accounts are reconciled. And if you started in Jan, within the starting time xxx days wouldn't you be looking at reconciling the accounts, and if you had done that you would have realized that accounts haven't been reconciled since 2010?
JOHNSON: Well, are you specifically speaking of Con Greenbacks? Con Cash was 2014.
DOMB: Payroll account.
JOHNSON: Payroll is 2010, that'southward correct. And like I said, in wholesale talking about reconciling what the staff was doing it was learning all that, and information technology was not disclosed fully at that time to me that the staff was working and just getting in and finding out day to mean solar day, and with that that's how I plant out.
DOMB: If you were hired as a Treasurer for whatever company other than the metropolis of Philadelphia, within xxx days of the shut of the month the responsibilities are to brand sure the depository financial institution accounts are reconciled, so I don't empathize how it took from January until someone in May telling y'all, that you didn't realize they weren't reconciled.
JOHNSON: Okay, and I'1000 telling you that, you know, having conversations going through wholesale with everyone in the section, and all that they are reconciling where are they with it was not fully disclosed at that time to me at the severity of it, you know, so I did not find out until that time.
DOMB: Did you ask in February, for example, have January's records been reconciled?
JOHNSON: Did I enquire that specific question? No I did not.
DOMB: Or in March or in Apr?
JOHNSON: I tin't recall that I asked a specific question to that nature.
DOMB: I only ask because in any business, you ask 15 days before the shut of the month, you lot ask your accountant, has everything been reconciled? What's outstanding?
Domb goes on to walk Johnson and Dubow through the timeline. That'due south when it emerges that even more than accounts than had previously been disclosed accept not been reconciled . At the 9:29 mark, Domb can't even get Johnson to provide a range every bit to how much greenbacks is typically in said accounts. He's doing more than pulling teeth. Watching the display, you lot're like: Yous're the freakin' Treasurer! How practice you not know what's in the accounts? Rather than treating all united states of america to his head exploding, Domb focuses on the lack of bureaucratic urgency:
DOMB: Why did information technology have so long, over a year, from May of 2022 to the CAFR [the Comprehensive Annual Financing Report, which uncovered the then-missing $41 million in the consolidated cash account] comes out in June of 2017, and now we're sitting in '18 when we're just getting the accountant on board. Why did all that fourth dimension lag?
JOHNSON: Well, i, we had unlike processes that we needed to go through to notice out the why, kickoff to put information together, so all this time we were doing work.
Dubow chimes in to remind Johnson that her office had staffing issues at the time, equally well. Only notice the response to what should take been taken every bit a financial crisis: "Nosotros had different processes that we needed to go through." Procedure is the language of bureaucrats, not innovative problem-solvers, which Domb implies in his response:
DOMB: My point is we're probably talking about accounts that full 15 to 20 billion dollars over the years, and if yous found you were short people to exercise this work in May, you should have come to this body and said we need to hire an exterior auditor at that point and do it. The issue for me is nosotros can all make mistakes, information technology's the corporeality of time to get this corrected. This is, similar, really important.
Dubow points out that an RFP did become out in October or November for an outside accountant (to the tune of $500,000). Domb doubles down on his point:
DUBOW: The responses came back in January of 'xviii.
DOMB: I guess my bespeak is from May of '16 till fifty-fifty October of '17, that's fifteen, 16 months went by. I will say that, for me, it'south that night I'thousand trying to figure this out. Why did we let all this time go by with this corporeality of coin?
The hearing ended with Johnson and Dubow committing that all city accounts will exist reconciled and up to engagement by June 30, just their testimony actually raises more questions than it answers.
Why was Johnson not initially told when she became Treasurer that so many accounts hadn't been reconciled? What did Dubow know well-nigh that , and when did he know it? Volition the metropolis's bond rating pay the price for Dubow'due south and Johnson'due south sins? Volition PICA, the land oversight board created to "foster the fiscal integrity of cities" have activeness to try and restore some semblance of financial brownie to Philadelphia regime? Why hasn't Inspector General Amy Kurland weighed in on this, given her office's mandate to root out abuse, waste and fraud? Dubow and Johnson say the missing $27 1000000 is due to accounting errors, only, as Controller Rebecca Rhynhart has pointed out, not regularly reconciling depository financial institution accounts is often an inducement to wrongdoing.
I caught up with Domb the mean solar day after Johnson's testimony. He said he hadn't slept the night before. "I was feeling bad," he said. "Am I hurting the city by exposing this?" Just and then, he said, he'd stop himself. "This is insane ," he said. "It's worse than I thought."
The number of excuses and discombobulations nigh accept the event of numbing your outrage. Virtually. Simply then y'all think about how this assistants is seeking even more in taxes while exhibiting such disdain for the taxpayer, and your blood pressure starts to boil anew.
And where are Domb'due south colleagues? But 2—Council President Darrell Clarke and Councilwoman Jannie Blackwell—were present for his cross-examining of Johnson. Blackwell didn't respond to a request for annotate.
Finally, there'due south Johnson and Dubow themselves. Dubow has long had a stellar reputation. Only he'southward never been a beacon of transparency in government, going back to complaints in the early days of the Nutter assistants virtually his pushing back against making the city's data more open up.
In her 15-twelvemonth career, Johnson has served every bit an investment banker, financial advisor and issuer, working in municipal finance at Loop Majuscule Markets and Public Financial Management and heading the Philadelphia office of financial services business firm Siebert Bradford Shank.
These are non unaccomplished people. But both are in dire need of an infusion of haji, which refers to the Japanese civilisation of shame that calls for leaders to hold themselves strictly accountable when they fail to live upwardly to their obligations.
When I interviewed Dubow and Johnson prior to their testimony final week, Dubow said he's answerable. But what does that mean? I'd ask him to consider the 2011 example of Japanese Prime Minister Naoto Kan. His government had just botched its response to a national earthquake, seismic sea wave and nuclear disaster, and Kan'due south caput hung in shame.
"Under the astringent circumstances, I feel I've done everything I can practise," he said. "Now I would like to see you lot cull someone respectable as a new prime minister."
With that, Kan resigned. His shame and human action of contrition was non unusual; in fact, 5 of Japan'due south previous prime ministers had similarly stepped downward amid popular criticism over the past five years. All were acting in accord with the custom of haji .
As the Kenney assistants seeks yet more tax increases, information technology's clear that a disqualifying lack of care has attended the stewarding of those that have already been paid. Instead of the dissembling and obfuscations we've been hearing about that, we need a little haji coming out of City Hall. Dubow and Johnson should follow Kan's lead and both pace aside and make style for fresh eyes at finance and treasury and, going forward, we should all demand that financial oversight be seen every bit a key component of the Mayor's to-do listing.
Description: While last week'southward testimony was the beginning time it was publicly revealed that multiple accounts take not been reconciled for years, the City Controller's office has pointed out the discrepancy in an internal command study for the last four years.
Source: https://thephiladelphiacitizen.org/what-did-they-know-when-did-they-know-it/
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