Entries Tagged 'Audit' ↓

Councilor Neitzert finally talks about the Internal Auditor nomination

With a 5:30 special meeting vote taking place this afternoon, Neitzert finally says ‘something’ about his nomination, or is this about Stehly?

“This is a shameful and disappointing display of city leadership.”In a recent press release, City Councilor Greg Neitzert responds to this weeks Audit Manager Nominee robo-calls put out by fellow council member – Theresa Stehly.  Neitzert also refers to the calls against nominee Shana Nelson, as scorched earth tactics.

I guess Neitzert is admitting Stehly is a ‘Leader’. He often uses the ‘scorched earth’ argument anytime Stehly does something radical to get the public’s attention. Did she have much of a choice? NO one from the audit committee or from council was telling anyone about the nomination and her obvious conflict of interest.

Original press release:  “While many families were celebrating Easter, they were interrupted by an unsolicited and misleading phone call (“robocall”) from Councilor Theresa Stehly intended to provoke anger and distrust within our community.  We urge citizens to hear both sides before making any judgments.

Not everyone in our community celebrates ‘Easter’. In fact pulling a Christian Religious holiday into the argument would seem to me a reverse usage of ‘Scorched Earth’ tactic. How dare people be bothered by local politics (call went out on Saturday) when they are trying to eat their hams and chocolate Easter bunnies, the shame! The Shame! I do agree to listen to both sides, because anyone with common sense will see that Mrs. Nelson has a gigantic conflict of interest.

Shana Nelson, an outstanding city employee with financial expertise, a background in accounting, budgeting, regulatory compliance and business process improvement, and extensive knowledge of city operations, is exceptionally qualified for the position of Internal Audit Manager.  That’s why the hiring committee, made up of 3 City Councilors (Neitzert, Soehl, and Starr) and one citizen with extensive audit experience UNANIMOUSLY recommended her to the City Council for appointment.

While she has a great resume, she has NO audit experience. She is also married to a city director who runs the parking division and pushed through the parking ramp downtown (that is rumored to be in limbo). Neither of those things really matter. Her conflict lies in the fact she would be in charge of auditing departments that she worked for. And while some would argue this helps her know her way around things, it also makes it much easier for her to ‘skip over’ the bad stuff. In other words, an independent auditor needs to be ‘independent’ and by coming from the administration where she actually implemented their financial software, there will be NO independence from them. An internal auditor is not supposed to be ‘cozy’ with the departments she is auditing. I’m not saying the internal auditor needs to be a total ass-pipe, but they have to be independent and willing to expose fraud and corruption regardless of who is committing it, otherwise there is NO purpose of having an internal auditor that is just going to babysit and be a hand holder. Neitzert has admitted they would use an outside auditing firm to audit the sensitive departments that Nelson would have conflicts with. Doesn’t she have a conflict with the ENTIRE city administration?!

Far from being “ram rodded”, this process has taken months to get where we are today.  An unprecedented amount of communication and involvement of the City Council took place, with the City Council agreeing on a hiring process, and all Councilors given the opportunity to review ALL of the applicants and the opportunity to interview and meet individually with the recommended candidate.  Placing this item on the agenda of the special meeting required SIX of the eight City Councilors – a SUPER MAJORITY – to sign a document approving the request.  Normally only two signatures are required to place an item on the agenda of a regular meeting.  Without those six signatures, we would not be considering this request.

This isn’t about what the council ‘knew’. This is about allowing the citizens to also vet Mrs. Nelson. The public didn’t know about her appointment until last Friday at about 3:30 PM when she showed up on the agenda. There is also NO biographical information about Mrs. Nelson. This is about informing the public, not about executive sessions the council had about her.

These scorched earth tactics are done with no regard for others, and is motivated by a win at all costs, ends justifies the means mentality.

Nobody really wins here. As I understand it, it will take 5 votes to hire Mrs. Nelson. They have the 5 votes. The real loser here is the public, because we have a majority of the council that is willing to hire someone with a blatant conflict of interest.

This could have a chilling effect in our efforts to recruit future City employees who will have to ask themselves why they should put themselves and their families through these types of antics.  This is a shameful and disappointing display of city leadership.”

Recruit city employees? You didn’t ‘recruit’ anyone. She already works for the city. The administration is actually losing a valuable employee in the financial department (and strangely they have NOT objected – and why would they, they now have an insider on the audit side). Recruiting an actual internal auditor would have taken a national search using a recruiting firm to do so, instead of the city’s HR department. Greg is right, this will have a ‘chilling’ effect on the city, because we are essentially saying our internal auditing department is NOT important while having the fox watch the hen house.

Sorry Rick, public input is our time, not yours. Figure it out.

Week after Week we have to listen to Mr. Kiley bloviate, blubber and evaluate. So when we get a chance he has to try to cut us off because of some ‘rule’ he pulled from his ass. It’s an audit meeting, Bruce is talking about audit standards (that was covered by Oksol). Rick, STFU.

From Bruce;

Here is what I was ready to say when Mr. Kiley decided to interrupt me at the April 22, 2019 Sioux Falls City Council Audit Committee meeting.

No Disrespect for the persons here or the person this board is hiring, but…

How does transferring an entrenched city employee into the internal audit department accomplish the board’s original purpose?

I have 40+ years of internal and external audit experience. In one job, I was part of an effort to save 1,000 jobs while uncovering $500 million in schemes running in 22 different scenarios. I understand auditing.

Why is this body willing to put each individual on this board in a potential legal liability by ignoring several legitimate fiduciary questions?

Why would the chosen new hire be willing to be put in a position of having to recuse from audits involving her prior work?

Why would a person accepting an audit job accept a potential conflict of interest involving a family member?

With multiple city projects being questioned and this board should be reviewing, why is this choice being considered?

A person who trained city staff on the use of a computer program is now setup to audit her own work product?

A person who gave approvals for projects in the city’s largest department now is to audit her own work product?

By ignoring the warnings, the members of the committee and others could be opened to investigations, who wants that?

The persons in charge and accomplishing proper audits should have one trait, curiosity, insatiable curiosity.

Curiosity to ask questions no one wants asked.

You can have all kinds of data but if you are part or were part of the process you are tasked with, you lose your ability to ask the simple questions. You do not ask the simple questions possibly out of embarrassment, maybe out of your need to give all the answers. You don’t have curiosity because you may know everything before the audit begins. Hard to ask the questions when you already know the answers. Since you already have all the answers and know how to find your own data, you know which file cabinet drawers should not be opened?

Only an outsider will ASK others WHY, instead of TELLING others why. There is a difference between ASKING versus TELLING answers.

As members of this Audit Committee, ask the question, “Does this process meet any standards required in any Fortune 500 company?”

As members of this Audit Committee, ask also this question, “Does this process meet any standards required in any not for profit organization?”

The two answers will be a resounding “NO”.

Citizens know of problems in city processes. How does this choice meet any recognized standard necessary to meet legal, financial and moral codes of conduct or ethics to keep citizens in believing in this government?

You are forewarned, the questions we ask are the basis for possible RICO investigations. Is this rush to transfer a potential employee to be involved in auditing her own previous work worth the wrath of future investigations?

There are too many problems and no logical answers.

Sioux Falls City Council Agenda, April 22-23, 2019

Audit Committee Meeting, 4 PM (4/22)

External Audit Reports; This is where an external auditing firm (the same one we have been using for years and years) looks at our financial statements from the previous year. This is NOT a thorough independent, forensic audit.

Public Assurance Alliance does a presentation on Trends and Risks. New director, David Fiddle-Faddle returns to the Chambers to enlighten us with his immense wisdom. Make sure the security cameras are turned off or scrubbed later.

Audit report of the Zoo. Still one of the tightest ships ran in the city. I still think the Director of the Zoo should run for Mayor.

Fill-In, and Previous Internal Auditor, Oksol is going to tell us how to measure performance out of an internal audit staff. First step; make sure you have a staff to measure.

They finish with giving Oksol a gold star for helping to fill in while looking for a new internal auditor manager. He must have been volunteering his time? Who knew?

City Council Informational, 4 PM (4/23)

March Financial Update

Overview of Spring Flood Recovery

Use of unobligated capital funds

City Council SPECIAL Meeting, 5:30 PM (4/23)

I noticed that the special council meeting is missing Public Input at the beginning. I’m not sure they can skirt public input at the beginning just because it is a special meeting. I think the new changes in state law say they must provide public input at all public meetings.

Item#3, Approval of Contracts,

Seems we are buying two new Harley’s for the SFPD. I find this interesting since the last couple of bikes we bought were NOT Harley’s (I think they were Triumphs).

Items #4-5, supplemental appropriations for the Rose/Lotta neighborhood homes. I think this will pass with full support of the council, besides some bickering about where the money is coming from.

Item #6, Motion, Appointing Shana Nelson as the new Internal Auditor Manager. As I suspected they are plucking Shana from the Finance Department where she works as a business analyst creating a conflict of interest between the administration and city council. Shana’s husband, Matt Nelson is the Director of the Parking Department. So how does she audit that department fairly? Further more, with some pending issues with the DT parking ramp, will we ever get a fair audit of the department?

Events Center Campus Book Club Meeting, 8:30 AM, Wed 4/24, Convention Center (we will see if it is filmed this time and if they have any chairs for the public)

Click to Enlarge

We need an Inspector General NOT an Internal Auditor (Guest Post, Bruce Danielson)

The Internal Audit department was established after it was discovered we had an out of control administration. The plan for establishing an Internal Audit department came about because laws were broken by city personnel with no process to make sure it could not happen again (The offenders were never charged with a crime because council chickened out, and the main offender got re-elected to a 2nd term). The framers of our government did not see a leader or employee, willing to destroy the government for the chance to make a personal buck no matter what, in the Home Rule plan they put together.

An Internal Audit department was developed to be a place to go, to verify projects were completed on the up and up. If the City Council wanted to check a contract or process, they were able to have it added to the audit schedule for the year. The Internal Audit staff was not to change the mission or the audit plan for the year. What we have learned over time is how the Internal Audit staff either changed the audit plan because the work was “too hard”, complicated or they didn’t want to do it.

What we have found since the Internal Audit office was set up, staff has never functioned as it was proposed. Internal Audit has become a place of semi-retirement with no expectation of getting any meaningful work done. Internal Audit should not be the go along, get along function as it has been for many years. The Internal Auditor staff or its function should not be feared. If the office or function being audited is on the up and up, an audit should be welcomed. If the department has no issues, they should be recognized for running a tight ship.

The Internal Auditor should never be transferred from a Sioux Falls city department staff. An Internal Auditor staff member should never be put into the position of auditing their prior office, co-workers, family or friends. To think anyone in the Internal Auditor office would be hired out of the finance or public works or city attorney office or any other office now or in the future is just plain wrongheaded and presents a huge conflict of interest.

The Internal Auditor office in Sioux Falls must be a true auditor office. It should not be led by a CPA with bookkeeper bees for staff. The Internal Auditor office could be led by an engineer with a bookkeeper and an investigator. It could be a mix of any number of people from many different types of backgrounds. Curiosity and the ability to think outside the box are probably more important than their ability to build a spreadsheet.

I firmly believe we need an Inspector General office more than a happy clappy Internal Auditor cheering on questionably legal city government actions many of us have seen over the years. The citizens need to have an office they can approach with questionably illegal issues and not have them buried in a bureaucracy, never to see the light of day.

Internal Audit should not be the resting spot of guilty consciences, it should be the blunt force that would come down on a wrong process or person because curiosity ruled the day and found a hidden issue. Finding problems and fixing them is a good thing, it shouldn’t be perceived as a ‘bad cop’. As citizens WE own the government, it’s our money. Anything we can do to save taxpayers money by fixing or streamlining processes should be the ultimate goal. If someone’s feelings are hurt in that process, maybe they need to find another job in the private sector.

UPDATE: More like 15 months w/o internal auditing

UPDATE: Just for clarification, what I posted here are the WORDS of the COMMITTEE members, they are NOT mine. Just watch the video. Also, in NO WAY do I hold the city internal audit employees accountable for what ‘hasn’t been being done’. They have had to deal with a lack of a leadership, and that’s on the committee, as they stated in the video.

I stand corrected about what I said at Public Input the other night at city council. I guess a city councilor said I misspoke the other night by saying we went 9 months w/o internal auditing, and they were right. After watching the audit meeting (Dec 3, 2018 meeting, BELOW, FF: 1:20:00) it will be more like 15 months before we have a fully functional audit department.

Committee member Dean Buckneberg asks, “When was the last time we had a fully staffed audit department?” Neitzert replies, “June (2018).” Dean replies, “It will be another 9 months before we are fully staffed.”

So it seems it is even longer than I originally thought.

 

City of Sioux Falls has had no internal auditing activity for 9 months

I guess the first question I have is, what has the remaining staff been doing after they lost leadership?

Besides the fact they were collecting a pay check for doing nothing for 9 months, one of the audit committee members expressed dismay in this revelation. I think his words were, “That’s not a good thing.” Especially with the change of power at city hall, not having an internal control like that doesn’t bode well for the taxpayer.

I was glad to hear they are back on track, but this should have never happened.

Sioux Falls School District responds to Open Records request

The SFSD has responded to Bruce Danielson, Citizens for Integrity and our media partners. Bruce received a packet over the weekend from the District with bond election documents and resources. We are going to review with our partners and let you know what we find.

Stay tuned!

OPEN ENROLLMENT CHANGES

I also found the agenda interesting tonight, Item#13 is 1st Reading of stricter open enrollment rules (Which I 100% support). But I find it interesting that NONE of these changes were discussed BEFORE the election. If you look at the red notes in the exhibit you can tell they probably have been working on these changes for MONTHS. Makes you wonder if they knew showing these proposed changes to parents before the election would have affected the outcome? Slippery Petes.

(FF: 45:00)

It only took 14 years, but the audit committee is finally talking about the Phillips to the Falls fiasco

Funny how these things work? Councilor Kavanaugh was going to file charges against Mayor Munson for violating ordinance and state law for the cost overruns on Phillips to the Falls, but somehow those intentions mysteriously disappeared and Munson successfully ran for a 2nd term.

Now the Audit committee brings it up;

Read the whole thing here (Interesting we spent over $10 million to date on Phillips to the Falls): Audit-history

Not only was there internal city violations, we sat on the property for over 10 years basically holding it for a private developer without any good faith money, than we handed them TIFs. Funny how none of this was brought up when the developer was asking for the TIFs and the council approved them. But hey, we got some FREE dirt for the Levitt.

Also, and something I have known about for awhile, they are bringing back the former auditor Rich Oskol as an independent contractor (I assume) until a new auditor can be hired. Essentially double dipping (getting a city pension). Would be curious what we are paying him. They did the same thing in the city attorney’s office with a former city attorney that was retired to fill in until Stacy Koistra was hired. I don’t understand why the assistant auditors can’t handle the workload until a replacement is hired. That is how it is handled in the private sector, but hey, why am I bitching? I always say we can’t run government like private business 🙂

City Auditor realizes job is boring, quits

Well, I’m not sure if that is the real reason, but I guess the rumor going around the council chambers is she didn’t do much. Well neither did the past auditor. I have known for awhile that she was considering leaving and there was a bit of ‘drama’ going on in the auditor’s office.

So essentially now we have an auditor-less auditor’s office, and the city councilor in charge of that office, Neitzert, has requested to go to ‘management training’ to deal with them.

They need to hire a real Hard-Ass that will take the city books and turn them upside down.

I’m finding out post Bucktooth & Bowlcut that not to many things have changed.

Rose Grant. Elect an Auditor, Auditor

A Democratic candidate for Minnehaha County Auditor, Rose Grant will be running. Rose serves on the City of Sioux Falls Audit Advisory Committee, and has practiced as a CPA in Sioux Falls since 2000. She worked with East, VanDerWoudie and currently with her own firm Grant & Williams.