Auditors say not all is well at Portland City Hall (Jack Bog's Blog)

The City of Portland's audited financial statements for the year ended last June 30 have finally come out, and the auditors don't like everything they see. In a letter appended to the very end of the mind-numbing 339-page document, the outside reviewers make several findings of "material weakness" and "significant deficiencies" that they say violate state standards:

The City lacks the appropriate communication between the Portland Bureau of Transportation (PBOT) and the Office of Management and Finance (OMF) with regard to intergovernmental grant agreements (IGA’s) for the construction of capital assets sufficient for OMF to know the proper timing for recognition of capital assets covered in the IGA’s in the financial statements....
The City lacks adequate controls over the review and reconciliation of payroll related accrual accounts necessary to identify errors and to make timely adjustments where necessary.

The Portland Housing Bureau did not observe established controls over Housing and Urban Development Section 108 loans. As a result, loan transactions and outstanding balances at year-end were not properly recognized in the financial statements.

The City lacks adequate communication and related controls with the Portland Bureau of Environmental Services and the Portland Water Bureau sufficient to allow for the proper classification of cash and investments between restricted and unrestricted and between current and non-current assets; classification of short-term debt as long-term when it is issued as interim financing and repaid with long-term debt; and net asset classification between invested in capital assets, restricted, and unrestricted.

Lots of big bucks sloshing around, and some weak accounting practices. Sounds like a recipe for mistakes, or worse.

Comments (14)

I thought Sam was working on his XMAS list for all the extra money they have a week ago?

It's bad enough they lie, but they can't figure also?

Posted by Steve | February 15, 2011 11:09 AM

Looks like the auditors don't like the emperor's new money belt.

Posted by Mojo | February 15, 2011 11:12 AM

We've been telling you for many years the financial management of the Water Bureau under Leonard and Shaff has been irresponsible at best. They have used the Bureau as a clearinghouse for all kinds of accounting transactions i.e.,leaf clean up, unrelated to core responsiblities. Very hard to follow and a whole lot of cash flow in flux. Maybe that's why they need $millions in bond offerings to shore up the numbers. Hold onto your checkbooks folks as they "massage" their next budget proposal.

Posted by insider | February 15, 2011 11:25 AM

Just got this. Not sure if you did, but thought you might be interested. "Add your voice to decisions that affect you and your community by joining Metro's new online opinion panel. It's quick, easy and confidential. Join today and be entered in a quarterly drawing to win one of five $100 Powell's gift cards!" Apparently you opt in here: http://links.govdelivery.com/track?type=click&enid=bWFpbGluZ2lkPTEyMjA4NjQmbWVzc2FnZWlkPVBSRC1CVUwtMTIyMDg2NCZkYXRhYmFzZWlkPTEwMDEmc2VyaWFsPTEyNzY1NzMwNjQmZW1haWxpZD1naW5kYXduQGdtYWlsLmNvbSZ1c2VyaWQ9Z2luZGF3bkBnbWFpbC5jb20mZmw9JmV4dHJhPU11bHRpdmFyaWF0ZUlkPSYmJg==&&&101&&&http://www.optinpanel.org/

Posted by Ginger | February 15, 2011 2:54 PM

Geesh! All they had to do was glance at your sidebar....

Posted by Max | February 15, 2011 3:23 PM

"Maybe that's why they need $millions in bond offerings to shore up the numbers."

HOw can that be? They've raised water 50% in two years and haven't spent it on anything other than "studying" EPA proposals. There has to be a horde of cash in PWB.

"We've been telling you for many years the financial management of the Water Bureau under Leonard and Shaff has been irresponsible at best."

I appreciate that, but PURB has been saying the same thing for years and Leonard just takes and throws the report in the garbage.

As long aswe have the regime and voters keep them in, it'l be like this.

Posted by Steve | February 15, 2011 3:26 PM

I e mailed the Mayor and Commissioners last week asking they use the budget surplus they claim to return monies to city water and sewer customers. No response. Seems only fair if they've surplus they return it after lifting $20 million last year from water and sewer customers for the elaborate bike plan.

Posted by Bob Clark | February 15, 2011 3:30 PM

Totally agree with Bob. Can't afford the gas, electric, garbage, phone, cable, water any more. Regular employees with not fat cat salaries cannot keep up anymore. This is impossible.

Posted by Daisy Chain | February 15, 2011 6:16 PM

What WAS the reason Erik Sten left so abruptly?

After asking this I recalled Nigel J's WW interview:
http://www.wweek.com/portland/article-8233-sten_calls_it_quits.html

In hindsight . . . .ah hell, we're doomed.

Posted by msmith | February 15, 2011 6:39 PM

Negative notes and exceptions like this don't make it into the final public document on these things casually or without lots of prior back room arm wrestling. This is an accounting firm more concerned about being tarred with Portland's brush than losing future business on account of a reputation for harshness.

Posted by Fiscal Conservative | February 15, 2011 7:09 PM

Creepy should use McFarlane's line about the TriMet recent audit.
"It's a bunch of apples and oranges put together to come up with an unreasonable number"

Posted by Ben | February 15, 2011 8:31 PM

Ben, McFarlane's line is like PDC's Larry Brown and other staff saying,
"We don't include debt cost of a project in calculating the total cost."

That's our economic problems locally and nationally.

Posted by lw | February 15, 2011 9:15 PM

Perhaps the mayor is hiring 17 year old boys to fill key positions rather than trained, experienced men and women?

Posted by Saltherring | February 15, 2011 10:24 PM

Fastening. MR.Mayor is the Commissioner in charge of BOTH bureaus. Boy, times have changed in the short two years since I was there and working for both bureaus.
1. The Mayor listens to know one.
2. Ken Rust, Chief Administrative Officer is checked out....didn't want his job in the first place and does not even try to offer advice. Insiders say he doesn't really care about doing his job - and Ken,please don't go after who you think are my friends...you'd be punishing people who are innocent. There are many that have lost all trust in your abilities.
3. Sue Keil...PBOT yes-girl who just did what Sam said despite laws and city code.
4. Tom Miller...yes-boy now in charge of PBOT who knows NOTHING about transportation...no change, except he's a bully.
5. City Council...who must read their comments on everything they discuss because they do not know what they are talking about.
Sad state of affairs.

Posted by Mary Volm | February 16, 2011 10:47 AM

Search this site

About

Clippings

Archives

Links

E-mail, Feeds, 'n' Stuff

Tuesday, February 15, 2011

Auditors say not all is well at Portland City Hall

Comments (14)

Sponsors

In Vino Veritas

The Occasional Book

Road Work