Council addresses overspending: A night of smoke and mirrors

Regarding the Modesto overspending debacle – one thing is clear – we, the public are no closer to accountability or real answers.  That is because we, the public were never meant to get the truth.    In all the dust and smoke and noise during Tuesday night’s Council Meeting, very little substance or clear conclusions were reached.

For in-depth analysis and background data on the City’s overspending, see our article on the Back Story news website http://www.backstorynews.com/overspending-at-the-city-of-modesto-the-scapegoat-excuse/

You can always get on your phone at 5PM to join the discussion on live FM radio at (605)-477-5071

Since the focus of this meeting was to retroactively approve spending that was not initially approved by the Council, a consultant was paraded out to give a presentation and explain “how this happened.”   In reviewing the actual written report By Bob Deis from the Public Management Group, I have a few observations:

The consultant was limited by the Interim City Manager, Joe Lopez in his ability to gather concrete data or conclusions.   The perfunctory and passive voice tone of the report reflects this.  Consider the following quotes from the report:

  • In the First paragraph under “Purpose of my engagement”, Mr Deis states “You wanted a City Manager perspective on the larger issues such as Modesto’s organizational culture…” (Interesting, he was engaged to address the preconceived problem of culture)
  • “It is important to mention that I did not conduct an independent audit of activities. I heavily relied on staff assistance and the accuracy of their reports”. (Wow, He did not act independently, and did not audit, instead used staff for the answers… fox in henhouse)
  • “The recently discovered errors in past purchasing practices is unfortunate, but it provides a learning opportunity…” (Wow, expensive learning opportunity)
  • Modesto is nowhere near the state of the cities that I mentioned above.” (Gee, Modesto’s not THAT bad)
  • “While I did not conduct a thorough review of Modesto’s culture, I did interact with the senior leadership of the City to assist in performing my charge from you.”  (Again he did not audit or act independently, used senior leadership for answers – fox in henhouse)
  • “Purchasing Staff Collaborated on Violating the City Municipal Code” (Hey – now that sounds very serious, does he know which staff?)
  • “… Modesto apparently experienced a unique collaboration across multiple purchasing staff to circumvent conformance with policies and the code. I have never seen purchasing staff willing to amend contracts (both term and dollar amount), or create a new contract without the proper Council approval. It worked because they could change the contract amounts in the Oracle system, which accounts payable relied on to approve payment. The fact that operating departments did not question this practice, when it involved contracts solely for their department’s use, is surprising to me.(Unreal – this is an emphatic statement that describes clear wrongdoing – again, does he know which staff?)
  • “Purchasing staff regularly over road [sic] the very controls they were to enforce in the City.” (again, more damning statements – without the “who”)
  • The City commissioned an independent review of purchasing processes and staffing levels by Management Partners. Their review was not a detailed audit of transactions but a staffing and process review from 10,000 feet.” (Gee, not an audit, and done from 10,000 feet)
  • “…gatekeeper role worked, except for the “override” role played by purchasing staff…” (Wow, it worked except for the “overrides”)
  • “…you might consider reviewing your credit card usage and compliance with Council policy and administrative rules.” (Uh, ya think?)
  • “It does not take much leap in logic to question if there was any malfeasance considering the apparent proclivity of bypassing the City code. To that end, I encourage the appropriate due diligence to ensure no City employee participated in any malfeasance or fraudulent activity. As you know, we are pursuing this effort and have yet to find evidence of this. However, this later effort has to be methodical and thorough but also take into account the cost/benefit of additional effort. This will continue as of the publishing of this document and will continue afterward.” (He is saying two separate things here “they need to conduct a malfeasance audit”, but they really aren’t, they want more money to do that and heck, it might cost more than it is worth)

The night was punctuated with frustrated Council members who had not received the consultant’s report, and many other improper procedural issues that left many of them ill-prepared to discuss the issue, let alone vote on it.

Joe Lopez amazes me – he looked the Council and the public straight in the face, taking no real responsibility – just mumbling about the culture, and how long it’s been going on. He didn’t fall on his sword, nor did the Council hand him one.   However Councilmember Ahyou did point out to Joe Lopez that “this happened on your watch” and she wanted an in-depth audit.

The thought of a forensic audit irked Mayor Brandvold, and he found himself alone with Councilmember Grewal in resisting it.   With mumblings about cost-benefits, and how late in the evening it was – the issue was kicked to “a finance committee meeting at some later date” and the glum faced Council adjourned.

We at the Back Story will be looking for the forensic audit to show up on a future finance committee meeting. And stay tuned, this issue is far from dead with us.