Chick, Greuel and the DONE Audits

By Paul Hatfield (Posted first at Village to Village)

Two audits performed at two points in time, both indicating the same types of problems: what does it take to inspire action?

Wendy Greuel appeared at last Thursday’s meeting of the Valley Alliance of Neighborhood Councils. (Video clips .) The subject was the recently released audit of DONE, [LINK] one that raked the often criticized department. There was a laundry list of major findings. The findings reflected a culture of incompetence and poor leadership regarding financial management.

There was no shortage of questions. There were almost fifty NC Board Members or stakeholders in attendance, representing most of the Valley NCs. Nearly everyone in the group had a question regarding the audit and its implications.

The questions could be categorized as follows:

• The audit put all the NCs in a bad light even though fraud was attributable to only a few individuals and made possible through gross negligence by DONE’s staff.
• The audit would be used by certain members of the City Council to further dilute the influence and funding of the NCs.
• The audit was nothing more than bullying – picking on an easy target when there is so much more wrong in the city.

However, the most pervasive set of comments expressed a consensus of no confidence in DONE.
According to Wendy, DONE requested the audit out of concern for reported shortcomings in its policies, procedures and lack of systems. You have to wonder why an audit was even necessary. Nothing has changed at DONE since the first audit. Why would things be better?

Well, at least one additional piece of information came out of the audit - a $5 million unreconciled difference surfaced. That is a meaningful amount in any organization, but for a small department the size of DONE, it is staggering.

It makes you wonder what became of the recommendations made by former Controller Laura Chick a few years ago. [LINK] The problems cited in the new audit are not new – they were certainly in existence when Chick’s review was completed. The ingredients for this foul recipe were stewing in the pot even then.

What happened? Why wasn’t any action taken?

Laura Chick dropped the ball. As much as she raised the profile of the Controller’s Office, her skills at follow-up were deficient. The office charged with the responsibility of protecting the assets of the city must not allow conditions that facilitate fraud fester unabated. The Controller’s Office, then, must share the blame.

Add the Mayor to the list, too. He was a recipient of the report. As the chief executive of the city, he bears the ultimate responsibility for the actions of his general managers. Perhaps his interests were otherwise consumed by photo op activities.

It is not enough for the City Controller to produce a list of shortcomings and recommendations, it is her duty to press management to take action to either correct the findings or show cause as to why they cannot. Laura failed in this regard.

The ball is now in Wendy’s court. It is up to her to pressure the Mayor and DONE to take whatever action is necessary to eliminate the conditions that created the chaos. That could, and should, include recommending firing DONE’s management team. If you can’t get fired for utter incompetence in this city, then what does it take?

I have no confidence in DONE to implement and move forward with the necessary changes – even with support from the Controller’s Office or volunteers from the NCs.

It will require conviction on Wendy’s part to make things happen. It will also require a team of auditors to clean up the damage. That will cost money. I recommend that no new managers get hired until a plan is in place to start fresh. The reduced compensation by firing the management team can partially fund the effort. Basically, I am calling for a stand down. In its present state, DONE can only create more damage. The audit team should assume interim control.

Do we move forward with resolve, or do we file the audit on the shelf with all the others?

(Paul Hatfield is a CPA and serves as Treasurer for the Neighborhood Council Valley Village. Read more Paul Hatfield at . He can be reached at

Vol 8 Issue 5
Pub: Jan 19, 2010

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