Village to Village, by Paul Hatfield, February 21, 2010

The title of this post might be perfectly fine advice for a mild headache, but how would you like it if you were carried to an emergency room with serious injuries and the doctor prescribed just that?

That is what has been happening in the City Controller’s Office since at least November 2006 when the Department of Neighborhood Empowerment was cited for a complete lack of financial controls.

Laura Chick simply provided DONE with an equivalent recommendation of “take two aspirins…”  To make matters worse, she never conducted any meaningful follow-up, instead relying on assertions by DONE that certain key audit recommendations were implemented.  Did she really take the word of a Department with no history of financial control?  It appears that she did.

Wendy Greuel conducted a follow-up audit at the request of DONE GM Kim. I credit him for requesting one, but he already knew that nothing had changed since Laura Chick first issued her report.  Whether Wendy would have initiated one on her own is debatable. There appeared to have been no movement by her office to perform any post-report review.

DONE General Manager BH Kim told the LA Times in Oct 2009 the $4.5-million neighborhood council funding program “was never really well thought out enough to prevent these kinds of criminal activities.” – referring to the credit card fraud committed by a handful of NCs.

Allegations of purchasing card fraud went back to 2007 according to the article and DONE offered no assistance: ”They kept trying to put it back on us (Olympic Park NC) to somehow review the expenses — we were not capable of having a meeting.”

In essence, DONE  remained out of control the entire time from when Laura’s report was issued through today.

Section 262 (b) of the City Charter states: Notwithstanding subsection (a), the Controller shall delegate to the various offices and departments the duties of inspection of goods and services and approval of demands, in accordance with methods for inspection and approval established by the Controller, but the Controller may suspend the authority delegated pursuant to this subsection upon a finding of abuse of that authority or on a determination that the office or department lacks adequate controls to exercise that authority properly. In the event of suspension of the authority delegated pursuant to this subsection, the Controller shall assist the office or department to achieve adequate controls and standards prior to reinstatement of that authority to the office or department.

So, I ask, what does it take for the City Controller to suspend authority and assume responsibility for a department incapable of responsibly processing monetary transactions?  Furthermore, how could the City Controller continue to pay invoices for DONE when she knew there were serious problems in the department?

Why am I even dredging up this old news?

Well,  it appears that DONE is being dismantled for all practical purposes. It’s not just about the budget crisis – DONE’s budget is small potatoes compared to the city’s as a whole.  It was more about the negative publicity generated by the actions of a few criminals, weak management within the department and, most important in my view, the failure of the City Controller’s Office to perform its fiduciary responsibilities.

This train wreck would have been avoided if the Controller had not been asleep at the wheel for three years.

What was the greatest experiment in municipal democracy is being trashed because the people responsible for intervening did not do their jobs.   That’s City Hall for you.