Audits find mistakes in City’s financial oversight, grant management

Two independent audits revealed the City is not balancing its bank accounts often enough and has made serious mistakes in its managing of state and federal grants.

A financial oversight committee consisting of half of city council, including City Representatives Larry Romero, Cortney Niland, Carl Robinson and until recently Emma Acosta ordered the audits in order to identify areas that need improvement.

Local accounting firm Lauterbach, Borschow & Company conducted an audit in April that analyzed the City’s Comptroller’s office and the Capital Improvements Department, formerly known as Engineering.

Lauterbach made several recommendations to the Council that mostly centered on improving administrative processes in the Comptroller’s office.

One finding raised the most eyebrows. Lauterbach auditors said the City had gone months without reconciling its bank accounts. When Lauterbach conducted the audit in April, they found the City had not reconciled its 218 bank accounts since November, 2014.

Lauterbach auditor, Jackie Salais told Council it should be done once a month.

“We (at home) reconcile our checkbooks on a monthly basis and that’s a tiny, tiny account. I can imagine the city not being able to do this on a monthly basis,” said City Rep. Lily Limon, who added she was “very very concerned” about the issue.

“That’s why ordered this audit and that’s why we wanted to make sure we looked at our process and procedures and how we can make them better,” Mayor Oscar Leeser responded to Limon.

The City’s Chief Financial Officer in an interview, said the Comptroller’s office has not been reconciling accounts often enough because the system to do so is manual and antiquated and because of high turnover.

“In about the last two years, we’re on our third treasurer. Well the treasurer is the one responsible for doing the back reconcilations. So handing off those processes, making sure that stays on track is very difficult when you have that high turnover,” said City CFO Dr. Mark Sutter.

Sutter added the Comptroller is working with Wells Fargo Bank to streamline and computerize the manual and complex process.

That wasn’t all the bad news. Another audit found several deficiencies or mistakes in how the city applies for and manages state and federal grants.

The mistakes range from not turning in required financial reports on time and misreporting expenses for certain fiscal years.

“That’s why you do audits like this to expose things like this and once you find these problems you identify them but you can understand when you tell me we used an invoice from years ago to qualify for funding now, that makes my blood boil,” City Rep. Cortney Niland told Sun Metro staff.

“To the comments that have been made about incompetence and nefarious activity,and also lack of training, the accountants you have at sun metro are second to none,” Sun Metro’s Assistant Director, Raul Escobedo told Council.

The City said it’ll implement new processes and metrics to stop the mistakes