“Self-Awarding” Has a Cost

By Clint Worthington 

I would have thought two years ago when then-Mayor Sam Allevato presented City staff with a “Project of the Year Award” from the American Public Works Association (APWA) for a job well done on intersection “improvements” to Junipero Serra and Rancho Viejo Road, that the City would have learned its lesson about accepting such empty platitudes.

As many residents know, that came back to bite them when the “award-winning” intersection improvements actually made traffic worse. The intersection was horribly designed and backed up traffic even more during rush hour, prompting many complaints from frustrated motorists.

When I addressed the City Council about receiving that award, I informed them that the APWA’s sole reason for existence is to hand out awards. In fact, every year since joining the APWA, the City has received an award, despite incredibly congested traffic (such as at the Del Obispo Railroad Crossing), yet not one year have they missed receiving an award. Not one.

The Government Finance Officers Association (GFOA) is another agency whose sole purpose it seems is to hand out awards. The GFAO recently presented the City with the "Certificate of Achievement for Excellence in Financial Reporting".

But what does this “award” really mean? Not much, it seems. According to a recent article  in the Orange County Register* (Jan. 17, 2013): 

“…the award does not measure fiscal stability. Instead, governments pay a national trade group to assess whether all the components of their budgets are in order. The review measures good looks more than substance.” 

According to the Register article, the “award” simply measures criteria such as; “Does the document contain a table of contents? Are all the changes from the previous year clear? Is the number of employees included? Are there any indicators to gauge a program’s effectiveness?” Seems to me the answer to the last question would have to be “no”.

“The GFOA gave the City of San Bernardino the ‘Distinguished Budget Presentation Award’ in 2011. The City of San Bernardino filed for Bankruptcy a year later.”- OC Register, 1/17/13

It’s clear the GFAO award does NOT measure performance. If it did, we would expect City CFO Cindy Russell to receive a demerit, not an award, for the following accounting problems:

· $3 million cash balance error – October 2012; cash balance overstated by $3 million.

· Failure to completely disclose a deficit of $5 million in the water enterprise – According to audit report January 2012.

· Issuance of debt [bonds] without consideration of the impact of increased expense resulting from the bonds – Audit report January 2012

· Collection of bond payments from water ratepayers for a bond that doesn’t exist – Result: lawsuit filed against the City by the Capistrano Taxpayers Association for illegal taxation.

A 2012 water department audit was so critical of the City’s accounting practices that they summarized their findings by stating, “The City should determine if the existing staff has the time and/or the ability to accurately forecast operating results…and if not, bring in outside agencies.” Ouch.

As the Register points out, these “awards” are not free. The City pays for membership in the GFAO, plus pays an application fee ranging from $185 to $1,380 (depending on the size of the agency’s budget).

In my opinion, if the on-going accounting problems are any indication, then paying for these awards is a clear waste of taxpayer money. I would hope that the City immediately cancels membership in both of these organizations, returns the awards and focuses instead on oversight of taxpayers’ dollars.

1 comment:

Anonymous said...

ha ha! Too funny! i wish it wasn't true...

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