We will have our annual bout with the city’s auditor, with their emphasis on proper procedures for city governments, next week. They will recommend stuff and we will promise to correct the problems. I have no idea how well we follow up on their recommendations, see below on tickle files.
Maybe we should consider further measures beyond the usual bland stuff.
We in Kentwood have had at least two employees steal while handling money, one to the tune of at least $300,000, so it’s worth our while to consider ways of preventing fraud. I have no reason to doubt the honesty of any of our employees, but it is prudent to minimize their exposure to the occasions of sin, to quote the Baltimore Catechism no. 2. There are other general problems that emerge only as poorly articulated feelings, and so I sit here blogging.
I”ve talked it over with Commissioner DeMaagd, our auditor Peter Heffner and with candidate Thomas Webb. The following are a composite of their ideas;
- Apparently individuals can accumulate vacation days without limit and so take a lump sum of money when they retire in lieu of time off. One problem arises when an individual accumulates months of vacation and we have to pay a huge lump sum at termination or retirement. It is capable of wrecking budgets. No one seems to have a handle on how large a liability that we face, but it could be millions. The related problem is that an individual who never or seldom takes vacation might be using his/her monopolizing of a job to commit fraud. If someone else were to do that job in his absence, the fiddle might be unmasked. Somewhere, a long time ago, I was warned to suspect the overly zealous employee, the one who stays late to do the job especially well, when no one is looking. We need a policy of restricting the number of vacation days carried forward, and of forcing employees to take their vacations for more than one reason.
- A system of spot checks, of having someone with forensic skills from the outside, take a close look at employees who handle money, at their books, practices, finances, follow up on where and who get checks and the like, on an unannounced and random basis. Perhaps there are accounting firms out there that we could put on retainer for a few thousand. They could do random audits during their slack times, and we could pay them a daily rate. It would take a lot of daily rates to be more expensive than the $300,000 loss from 3 years ago. If no such firm exists, maybe we should start one.
- Move people around from one job to another. Extensively cross train them and have them do each other’s jobs on a rotating basis. It would, as an intended effect, break up fraudulent practices, but also prevent burnout and boredom, and would give employees a better understanding of the how the enterprise works. Employees would have more skills on their resumes and improve their job prospects. The DPW already do this. I’m told that each of their employees has skills to fix trucks, cars, broken windows, have CDL3 so that they can drive snowplows and the like. Our police force has a similar provision in which each uniformed officer has to serves several years as a detective. Firemen inspect, counsel school kids and install fire detectors.
- I, and others, are vaguely troubled by statements, promises, projections that are made by management and officials, and that are subsequently lost and forgotten. What did happen to the internal cost accounting from 18 months ago, or the problem with Kentwood’s clay soil not absorbing storm water? We, on the commission, need a tickle file maintained by the city clerk or the mayor’s office so that items could be brought back to the commission on a regular basis.
- I have been told that we hire a snow plow service that does a sloppy job, yet this firm continues to win bids and gets taxpayer dollars. There should be a mechanism for reporting and correcting this low level fraud. Certainly complaints lodged by commissioners should be heeded and if not, heads should roll….As it is, commissioners, those who will actually speak are routinely ignored or placated. Perhaps a new commission will correct this paternalistic practice.