Entries Tagged 'Audit' ↓

Sioux Falls City Councilor Greg Neitzert and the suspicious ‘blue line’

Have you noticed the blue dotted line between the Operations Committee and the Internal Auditor?

Why is there a dotted line?

Is the Mayor assigning supervisory roles on the City Council?

If Greg is reelected on Tuesday, is he planning to “supervise” the Internal Audit office?

Hmmmmmm.

City of Sioux Falls 2019 COMPREHENSIVE ANNUAL FINANCIAL REPORT

This financial report was released yesterday after the Audit Committee Meeting yesterday.

2019 CAFR DOCUMENT

Remember, this is just a ‘review’ of our financial statements. This is NOT a forensic or investigative audit. In other words they are not digging around for fraud or blatant waste, they are simply looking to see if the actual accounting the city has done matches the statements. A cakewalk for any outside independent auditor.

I have argued for a long time that the city needs to start from zero with their budgeting at least every 3-5 years. That is NOT what occurs now. City departments basically take the budgets from the year before and tweak them. It’s lazy and and wasteful. I also think an investigative audit needs to be done every 3-5 years to look for fraud but most importantly wasteful spending.

This laziness (and greed) is one of the reasons our taxes and fees continue to grow at an astronomical rate. I think the city should run a tight ship that only spends on essential infrastructure and FREE quality of life (like parks). I also think they need to balance their budget each year. If the budget started from ground zero each year, you would see a lot more savings and fiscal restraint. This of course would require city directors, the mayor, and the city council to work at it, and together. I know, lofty goals 🙂

Sioux Falls Audit Process for 2020 loaded with Conflicts

Just when you think we can start having real discussion without conflicts of interest or just conflicts, we have the Chair of the Sioux Falls Audit Committee Greg Neitzert pouring more salt into the wounds. On December 2nd and 17th of 2019 Neitzert proceeded to highlight the recent monster mistake he made having a closed selection process for the Council’s Internal Audit manager. Now watch how he also is having to clean up the mess now encompassing 4 (count them) four possible ethics complaints being filed or other possible repercussions. Looks like being a little autocratic is like being a little bit pregnant? 

He told us we were wrong to question his process, guess who was really wrong, again?

The Bunker Ramp, the gift that keeps giving

So we hire someone with (several) conflicts of interest and we have to make new ordinances to tamp them down. Dumb.

Guidelines for dealing with conflicts of interests between auditors and city staff who oversee parking first need to be in place, said Councilor Greg Neitzert, who chairs the city’s audit committee.

“First we need to get the conflict of interest policy in place. Then you can start the process of who’s going to run point on (an audit),” Neitzert said. 

When Shana Nelson was hired as internal audit manager for the city last year, officials stated then that should the parking system ever be audited, Nelson wouldn’t be a part of that work. Nelson is married to Sioux Falls Parking Manager Matt Nelson.

Gee, Councilor ‘Friends and Family Plan’ wasn’t this brought up when we were basically moving Shana from one department to another? It seems we will never get to the bottom of what the Hell is going on with the parking department and Bunker Ramp.

I’m not sure a policy needs to be in place, maybe we should just hire someone who doesn’t have a conflict. Though I will admit that I have been impressed with Shana’s professionalism in the audits she has presented so far. Maybe she really is a ‘Rock Star’?

I have also been made aware that Greg pulled this from his sanitized butt and other councilors/members on the audit committee had no idea he was going to propose this and first found out about it reading the article.

Like the hiring of Nelson, I guess Greg thinks the audit committee is his little dictatorship. It’s good to be King.

Councilor Stehly gets it done without even voting

As I have mentioned in the past, Councilor Stehly has gotten a lot of things done without the votes, but by just simply putting on pressure.

She did it again this afternoon at the Audit Committee Meeting.

She asked for several things from the podium during the 2020 Audit Plan presentation;

• An external audit of the Parking System (Theresa mentioned that she found it odd that the city wants to keep building or subsidizing parking ramps downtown yet wants to sell off flat parking lots).

• An audit of the CMAR (Construction Manager at Risk) process.

• Travel expenses of city staff (I guess that during the current administration, city directors and staff, and mostly the mayor, have been taking a lot of ‘junket trips’ but not really giving a report to the public as what they are doing on the trips. Recently TenHaken put up a short column about his trip to China, but never really told us what was really discussed. We also get a lot of updates on FB from the Innovation Manger and all the different cities he has been drinking in.

• A study of City Director salaries in comparison to other cities. Something I pointed out the last time the HR department did a wage study, but did NOT include city directors. How convenient.

The committee argued the merits of all the items. Councilor Brekke mentioned that maybe the city council budget analyst could look into the last two items and do a presentation on those findings – which I agree.

Audit Manager Nelson suggested that the CMAR audit would have to be done externally due to it’s speciality of the audit.

But they got into a long discussion about the external parking ramp audit. Councilor Kiley said he didn’t want to put it on the audit plan because they are in the middle of litigation, but other members argued that there was nothing wrong with putting it on the agenda, and if they have to pull it in the future, they can. The amendment to add it passed with Kiley and Chair Neitzert voting against it. Councilor Stehly doesn’t sit on the committee so she couldn’t vote on it.

T.J. TypeOver said they won’t audit it until it is done;

T.J. Nelson, deputy chief of staff in the mayor’s office, said City Hall isn’t opposed to a review of the parking system or the ramp, but not until the ramp project is complete and the dust settles on any lawsuits surrounding it.

“The administration will complete a comprehensive review of the process that led to the prior approval of this project by the Huether administration. This will take place following the ramp’s completion and resolution of any outstanding legal matters,” he said. “At this time, the administration supports a financial or construction audit consistent with the time frame outlined above.”

Yeah, after we have f’d up in every possible way we can, then we will tell the public how that f’k up occurred. WHAT!? Wouldn’t it be wise to figure that out BEFORE we move ahead with another developer or even litigation? Wouldn’t this help our case? Sometimes I wonder if putting money in a burn barrel would be a better way to spend money then paying city communication staff.

There was also a presentation on the Landfill Audit. There was a lot of problems going on out there where basically employees were not following procedures and not doing proper inspections. You can listen for yourself. My view is the city is missing out on a lot of landfill revenue due to the laziness of the employees. I think they were warned about these things in past audits. I think it is time to start handing our pink slips, then maybe they will get the picture.

Chair Neitzert mentions at the end they are going to start the process of hiring another staff auditor (which they do need). I wonder if this time they will actually put an employment ad in something besides Tidbits and the City Hall’s lunchroom?

PUBLIC TRANSIT MEETING

I still haven’t heard all the details of what happened, but I guess a committee member got a little irate about how the public is being left out of the decisions they are making. More to come.

Sioux Falls City Councilor Neitzert ManSplains what our internal auditor does

Did the City of Sioux Falls Audit Committee really explore all candidates?

I know, I want to put this to rest as much as the rest of you. The RS5 made another horrible decision, and it will be fun to bring it up when a couple of them run for re-election. But I could care less about that now, because we must address BAD decisions in the here and now.

A couple of days ago I got a tip that some of the audit committee members (non-councilors) were not happy about the selection process, but were told to stifle it.

Today I was told from a city councilor a potential candidate told them they weren’t even considered or interviewed for the position. They applied late last year.

According to this candidate, they were never even considered by the audit committee. I first want to say that I have never met them, also, from reading the resume I saw, they are young and have a short work history, so I can’t tell you if they are qualified or not. But from reading the education and work experience (they are a certified auditor), I would have at least interviewed them. Am I missing something here? It would be one thing to interview them and then determine they are not qualified for the job, but to just look at this resume and go, “Nah, we already have someone picked out.”

And that seemed to be the case.

I wish this person good luck in their employment endeavors and that they should probably be thanking themselves they didn’t get the job. I’m just sayin’.

Sioux Falls Parking Department must be audited immediately

Some of the same players and city employees who helped the Rubber Stamp 6 and Bowlcut-n-Bucktooth ramrod the parking ramp through are still employed by the city, namely Matt Nelson, whose wife just became the audit something manager.

It will be interesting to see if the city will do any internal investigating of how city employees let this bad deal go through. In reality, it should not even have gotten to the city council for approval.

Now it will cost taxpayers more money to hire an external auditor. The hits just keep coming.

An Open Letter to Sioux Falls City Councilor Greg Neitzert

Over the past year there has been many things said by our esteemed councilor at public council meetings, on Facebook and in the media. It all culminated last week with the special meeting to hire our new internal audit manager and a discussion on the Greg Belfrage show between councilors Stehly and Neitzert in which Neitzert called Stehly a bully and a ‘LIAR’ he also inferred that councilor Starr was a liar to (which is actually a violation of council ethics).

While this was all going on Neitzert kept trying to say that the character of the new city council employee was being questioned, assassinated and denigrated. I still don’t know what he is talking about. In fact if you watch the council meeting or listen to anyone talk about her in the meeting, NOBODY questions her character only her qualifications. Some even state they are NOT questioning her character. If you are questioning someone’s qualifications for a job, that is NOT questioning their character – those two things are polar opposites.

So here are the FACTS that Councilor Neitzert claims people are ‘Lying’ about;

• Nobody on the City Council or during public input questioned Mrs. Nelson’s character. (I can’t speak to random comments on FB)

• While Mrs. Nelson has extensive financial and business experience (12 years) she has NO internal audit experience or supervisor experience.

• Mrs. Nelson has broad conflicts of interest with the city, not just with her husband as a director, but with the finance department she currently works in and a very close family friendly relationship with one of the sitting city councilors.

• Mrs. Nelson was warned in advance (before her nomination was publicly noticed) that the city council wasn’t in full consensus of her employment. She knew there would be a high level of scrutiny. This of course is NOT Mrs. Nelson’s fault, this ‘doubt’ was caused because of a poorly executed hiring process by councilor Neitzert. She still chose to move forward knowing it would be a contentious debate.

• Councilor Neitzert denies he ramrodded the process. He says that most if NOT all resolutions are noticed on a Friday and Voted on a Tuesday. While there is a lot of truth to that, most resolutions are benign, and have full support of the city council. They include things like gifting old equipment to other communities, appointing city board members, allowing SculptureWalk, giving out awards, etc. They don’t usually involve hiring a city council manager of this importance. They also are NEVER brought forward in a special meeting that has a singular objective (ex; golf contract). It was noticed on a Holiday Weekend, with NO attached documents that explained who Mrs. Nelson was or why she was qualified. It was also during a special meeting at 5:30 PM the following Tuesday. Her appointment could have easily been postponed for several weeks so the public could vet her. Just the day after her appointment Neitzert said it would be a full month before she transitioned into her position. So what was the rush? Councilor Stehly had NO choice but to put out a robo-call to inform the public this was coming down the pipe – FAST. While you may have had issues with her verbiage and tone, she did NOTHING wrong, or made false statements. It was ‘ramrodded’ and the parking ramp debacle was ‘controversial’.

• The city’s legal team blew off the nepotism and conflict of interest concerns as being ‘legal’ and since they were legal, in their eyes there were no problems. South Dakota has an ‘F’ rating in government corruption, mostly because we have NO ethics, conflict of interest or nepotism laws (or very weak ones).

• Mayor TenHaken never said whether Mrs. Nelson would be missed or even replaced (this would have been nice to know during a longer vetting process). You would think an employee with this much experience in finance, a person who implemented key finance software, and an employee who won an award (from the past mayor) would be valued by the administration and asked to stay. (I’m hearing from my city hall moles that there was a discussion about it, but since it was a personnel issue, and Mrs. Nelson would be bettering her career, they just let her proceed. If all this happened, I’m not sure why any of that is confidential and couldn’t be shared at the special meeting by the HR department).

• Councilor Neitzert said since he had 6 councilors sign off on her nomination he didn’t feel the need to get a total consensus. Though, during the meeting, councilor Brekke pointed out that most city council employees have a consensus of the entire council before getting approved. In fact, in the 13+ years I have been blogging about the city, the last time I can remember there was NO consensus of the city council was when they voted to terminate City Clerk Owen, and that discussion was behind closed doors with a public vote.

• After 3 weeks of job employment ads mostly online without the assistance of a job recruitment agency, the city got 15 candidates in which NONE of them had audit experience and only ONE of them was a current city employee, with an obvious conflict, and she was chosen. Some people call that ‘inside baseball’ but I won’t speculate any further.

Councilor Brekke suggested to Councilor Neitzert (who is the audit chair) that a broader search be done to find someone with audit experience. Her request was either ignored or rejected.

Councilor Starr, who was part of the hiring committee suggested early on that they hire a recruiter. They said it would cost too much, though Starr pointed out you could get one as low as $5K, and in most cases you don’t pay unless they produce qualified candidates. In other words, no harm, no foul. His suggestion was also discarded.

I think ‘the fix was in’ as soon as Mrs. Nelson turned in her application, and there was no going back from there. Just listen to what Neitzert said on Belfrage, ‘Shana is a Rock Star!’ Great, but why not do a broader search for a qualified ‘Rock Star’? And why totally ignore the suggestions of your fellow councilors? Who is the bully?

While I could care less if Councilor Neitzert wants to act like a Crazed Man-Child in the media, I am truly asking him to stop calling his fellow councilors liars, bullies, self-appointed victims and disrespecting and ignoring their opinions. If you disagree, you simply state that, and move on. If they have good suggestions about the hiring process, you try them. It’s really that simple.

As I have pointed out above, there is only one reason why this process when to Sh*t, and that person needs to take a hard look into the mirror. The only one who truly let down Mrs. Nelson through this process was the one leading the process, City Councilor & Audit Chair, Greg Neitzert.

UPDATE III: Sioux Falls City Councilors Stehly & Neitzert guests on Belfrage

UPDATE III: Neitzert calls himself ‘Audit Manager’ in the Belfrage interview. Who is lying? He is the chair of the Audit Committee. All city council employees (including internal auditor) answer to the entire council and entire committee.

UPDATE II: Listen to the interview HERE from this morning. WARNING, not suitable for small children 🙂

I guess Belfrage invited Theresa and Greg on Thursday morning to discuss the robo-call and hiring of the new Internal Auditor, 8 AM.

Some observations I made while watching the meeting last night were kind of startling. While the 3 councilors that voted against Mrs. Nelson’s appointment (Brekke, Stehly & Starr) contended there were too many conflicts of interest and the process was not open and transparent. Brekke said she would have liked to see a more extensive search.

But what shocked me is how the council and city attorney, Danny Brown, blew off the conflicts as normal operating procedure. Brown referenced the state which is steeped in nepotism and conflicts and said if the state permits it (it’s legal) than it must be okay.

First off, it should be illegal. South Dakota State government gets an ‘F’ in corruption. I have often contended that is due to lack of transparency, conflicts and nepotism. But just because something is ‘legal’ doesn’t make it right, and those 3 councilors did the right thing.

There was also a relaxed attitude towards the fact that Mrs. Nelson lacked audit experience.

But one of the biggest shockers was when Neitzert said that the internal auditor works for management (the council) and NOT the citizens. He had a round about way of saying it, but you got the gist. This was disappointing, because as Stehly pointed out, ALL city employees should be working for the citizens.

Brekke made the best points all night. Not just about conflicts or finding qualified applicants, but one of her best points was about how the council should have had a consensus on this since it was their employee. In fact, the council has had a consensus on the hiring of all of their employees in recent history. The last time they did not have consensus was when they voted to fire Debra Owen. Janet pointed out that it seems when the majority of the council doesn’t want to negotiate with the minority they shut them out and move forward anyway. She said it was frustrating and made the point that when the council is this far apart on disagreeing with each other, that was the best time to talk and and work out their differences. AMEN!

UPDATE: Last night at the meeting Greg said it was urgent to hire Shana right away so she would not be in limbo for two weeks, then he says this in a press release today;

Nelson will transition into her new role over the course of the next month.

Greg made it sound like Shana needed to have an answer right away so she could transition into her new position right away. Now we hear it will take a month! I assumed she would probably be moved in by the end of the week or Monday. With the administration not thinking Shana is that important to them, you would think they would have allowed her to pack up her box of pencils, Chia pets and city plaques today. Funny how things change the next day when the dust clears.