Tuesday, November 17, 2009

November 17, 2009 Crumley's Legacy Begins to Unfold. Where Was Council's System of Checks and Balances?

Morristown City Council meets today at 4:00 pm. [At their last meeting, they refused to move the meeting time to a taxpayer-friendly 5:00.]   Most councilmembers are happy with 4:00 and especially with the fact that 4:00 makes it inconvenient or impossible for working taxpayers to attend and actually watch what is being done with THEIR money.

I predict that some of Crumley's legacy of mismanagement along with council's failure to act as a check and balance on the administrator's power may begin to officially unfold today. The word is out. It may take a long time for the full extent of mismanagement by Crumley and cohorts to make it out into the public domain.  In fact, some of the mismanagement and/or illegalities may never be uncovered. In government circles, one level of power protects the other.

One of the most egregious acts of Crumley was the illegal transfer of $2.5 million dollars from the City sewer fund to the general fund in FY 2008 in order to conceal or prop up the "poor" cash situation of the general fund.

According to the city auditors, Crumley suggested the entry and authorized the entry in a meeting with the city's "independent" and "objective" auditor Tom Jones and Finance Director Dynise Robertson.

The transfer was then recorded by Jones in the 2008 audit as a "loan." 

After the illegality of this transfer was discovered, all those involved went into protection mode. The auditors said, yes, we were in the meeting where the journal entry was authorized but we didn't actually make the entry ourselves (we just knew about it). Just a couple of weeks ago, the $2.5 million was set to be transferred back from the general fund to the sewer fund---again no passage by the council, no mention in the paper. I guess two wrongs in the city make a right--especially if it's all conveniently handled in-house with no public acknowledgment or explanation.

[I expect some response and a brief explanation by the city pretty soon. It will probably one of those "spin" statements saying that it was just Crumley who did this. No one else had a part in it. No one knew it was illegal. No one asked any questions. Move on! And for Pete's sake don't expect us to hold anyone accountable. Well, spindoctors, consider this. If the auditors had pointed out this illegality when they prepared the 2008 audit or when they presented the 2008 audit to the council in May 2009, it could have saved the city taxpayers over $145,000.

Did the auditors really not know that a  loan from the sewer fund to the general fund requires local approval and state approval? Was auditor objectivity lost because of their presence in the meeting with Crumley where this transfer/loan was authorized? Was auditor independence compromised by being part of the financial process? With $2.5 Million being shifted around, wouldn't an independent auditor ask or check to see that proper documentation and legal procedures were followed? After all is said and done, auditors have the last call. If only they had blown the whistle on this illegality, if only someone on council had actually looked at the audit and asked about this, Crumley could have been fired without the fancy retirement party and the huge severance package PAID FOR BY CITY TAXPAYERS.]

And while most of that money (the $2.5 million that was illegally transferred) has now or will soon be transferred back to the sewer fund,  it will have to be transferred back again to the general fund pretty soon because, you guessed it, the general government fund is still in "poor" condition. Robbing Peter (sewer fund) to pay Paul (operate general government)?

Crumley is gone, but certainly not forgotten. His fiscal mismanagement and illegal actions are just starting to unravel. The council needs to do a complete and thorough audit of all city funds and departments before a new administrator comes in. The council also needs to set up a system of financial reporting along with a set of checks and balances before a new administrator comes in.

The city taxpayers should not be left holding the bag.  Higher property taxes, higher sales taxes, red light cameras, debt and more debt, and on and on. Lack of accountability put the City in the position it is today. Now, the procedures, regulations, and reporting need to change. And then the council and department heads and others must ensure that the new procedures, regulations, and reporting are monitored and enforced.  No more sleight of hand. Transparency and accountability are needed. Not cover-ups.

If things don't change in a big way, Morristown will simply have a new set of names but the same old waste, fraud, and abuse.

1 comment:

TimN said...

Good reporting. Same incompetence, different names.