Overspending at the City of Modesto: the Scapegoat excuse

Modesto government overspending

The scandal involving overpayments to contractors and vendors by the City of Modesto should move into the oversight of the State Department of Justice.   Enough of the excuses, outright misstatements of facts, kicking the can down the road and the final refuge of scoundrels – the scapegoating of a clerical employee down in the ranks.  Taking Personal Responsibility in a leadership position in Modesto is just not done. A Sad state of affairs.

On September 11th, 2017 we learned in the Modesto Bee that the City of Modesto paid for $9 million worth of street repairs while the City Council had only authorized $6.8 million worth of work (http://www.modbee.com/news/article172748761.html ).   City Officials pointed to human error by employees no longer with the city for Modesto, and interim City Manager Joe Lopez said. “The fact is we’ve done something we shouldn’t have,” and “We are trying to rectify the situation and are putting processes in place to make sure it does not happen again.”    As future revaluations were to start spilling out, I can only say you should have worked harder and made the unauthorized payments of our tax dollars a priority.   Well the chickens always come home to roost someday.

On October 21st, 2017 we learned in the Modesto Bee that the $731,350 5-year contract signed in 2011, was never renewed nor placed for competitive bid, when the contract ended in September 2016 (http://www.modbee.com/news/article180242401.html ).  Instead, payments continued in violation of City Code to the tune of $113,554.   This time we were told by the Interim City Manager Joe Lopez that. “We have lacked proper internal controls that would catch issues like this,” and “That has gone on for years.”  So In this instance, feign powerlessness and blame everyone before you.  It also helps to again blame “human error”.

Technology talk is boring, suffice it to say that the 13 year search for an improved accounting system cost millions and resulted in botched Request for Proposals (RFP), unresponsive bids, conflicting requirements, incomplete reviews and a host of other messes caused by a tug of war between the finance department and the IT Department.   In the end millions were spent, and the base functionality available in QuickBooks (prevention of overpayments to items linked to Purchase orders) was missing.  Thus a clerical position in the Purchasing Department gets thrown under the bus, and humiliated in the Modesto Bee.

On October 25th the floodgates opened as we further learned, in the Modesto Bee that in a review of only 80 contracts, more than one in ten contained instances in which the city has spent more for goods and services than what the contracts had authorized. (http://www.modbee.com/news/article180910541.html).   Clearly this calls for an independent, forensic audit to be conducted by the California Department of Justice.   If only 80 contracts reviewed uncovered a staggering 10% overpayment rate, what would the results be if the last 5 years’ worth of contracts were to be reviewed?

Even with the dereliction of duties amongst the leadership in Modesto regarding the oversight of taxpayer dollars, one would think that the City Auditor position would surely catch this.  Except, the City cannot get its act together on not only hiring a City Auditor, but determining the role and scope of duties.  Like the embarrassing void in the City Manager Position, the City Auditor position continues in a state of perpetual drama.  On March 10th   2010 Auditor Frank DeMattos was fired after only 18 months with an annual salary of $96,200.  In 2001 the City outsourced the position to Moss Adams (who did not even perform the city’s financial audits but focused on efficiency studies) at a cost of $181,493 yearly – he was let go in 2017.  Then Mayor Brandvold proposed spending double the amount (to $367,756) for an in-house auditor that would be a City Staff member.  Amazingly the new Auditor Position will still NOT have a focus on the disastrous Finance Department (root out the causes and exact reasons for issues such as overpayments).

The Auditor position will once again be diverted from the financial to a focus on finding more efficient ways for the city to operate.  Like traffic cops on Quaaludes, the Finance and City Manager leadership will lack a proactive stance, and continue the drip, drip, drip of financial malfeasance.    Their shame and moral bankruptcy will continue as they blame the everyday workers who, lacking direction and guidance, only pull the levers they are given.

Never mind that the Director of Finance has included in it’s Job Description “Oversee the general accounting functions of the City; provide financial support and assistance to City departments; ensure compliance with internal controls and standard accounting practices.” (http://modestogov.com/346/Job-Descriptions) .  No the buck doesn’t stop with the Finance Director…

Ignore that the City Manager’s Job Description  has “Direct and oversee the development and implementation of City-wide work plans; assign work activities, projects and programs; monitor work flow; review and evaluate work products, methods and procedures. (http://modestogov.com/346/Job-Descriptions ).  No the Buck doesn’t stop with the City Manager…

Bottom Line – this entire City Government Leadership is out of control.   From the people we elect going on record saying they are powerless and can only express dissatisfaction, to the City Manager and his Directors continuing to point fingers everywhere and make promises year after year to do better, it is a sad state of affairs and Modesto’s Government is becoming an embarrassment to us all.

Then Heritage institute (https://www.heritageinstitute.com/leadership.htm ) says it best:
RESPONSIBILITY AS A QUALITY OF LEADERSHIP:   A quality of leadership is the assumption and acceptance of responsibility for the organization and all decisions taken within the organization.

The leader is also responsible for making strategic decisions within the leader’s responsibility rather than avoiding or abrogating this responsibility.

A culture of taking responsibility cannot exist in a culture of blame and recrimination. A leader in a culture of responsibility, takes responsibility and shares the credit.

Words to remember, as we taxpayers and Citizens allow all this by our silence.