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Accountabilityby Fern Shen1:44 pmAug 7, 20120

Joan Pratt blames Finance Department for absence of city audits


Above: Joan Pratt attending a recent Board of Estimates meeting with City Council President Bernard C. “Jack” Young and Mayor Stephanie Rawlings-Blake.

Call it The Blame Game, Act Three (coming after two City Council votes where politicians squabbled over each others’ positions and agendas).

Asked on the radio yesterday why major departments of Baltimore government have not been audited in decades, Comptroller Joan Pratt said that the city’s accounting practices are as good as they could be considering some unusual problems – which she blamed on the Department of Finance.

Many Baltimore departments and agencies don’t do the annual down-to-the-penny financial review that’s needed by Pratt’s Department of Audits in order to perform audits.

(A fellow guest on the WEAA 88.9FM show, Baltimore City Councilwoman Helen Holton, pointed this out in Pratt’s defense.)

“How could we be spending millions of dollars and not have financials?” host Marc Steiner asked, in a flabbergasted tone.

“That’s a question you probably need to ask the Department of Finance,” Pratt said, referring to a department headed by mayoral appointees and held currently by Harry E. Black.

Another guest on the program, Councilman Carl Stokes, wasn’t letting  Pratt off the hook and faulted her for being “too nice” and not demanding departments balance their books every year.

“I love my comptroller,” Stokes said, “but she needs to say she needs financials.”

“We Welcome It”

The program, which also included Councilman Robert Curran and citizen activist Mary Alice Ernish aired as audits legislation moves through the gears of the political process.

At this point, a bill calling for voters to decide whether some (14 of 55) city agencies and departments would be audited once every four years is up for third and final reader before the City Council.

This bill already has been voted down – then watered down – by Council allies of Mayor Rawlings-Blake.

Asked by Ernish her position on the legislation, which is currently on the City Council agenda next Monday, Pratt said: “If the resources are provided to the department of audits, we welcome it.”

Pratt went on to warn that the auditing required under the proposed charter amendment would be costly, which could mean “some cuts, layoffs or services not provided . . . something is going to have to suffer.”

“Our finances are strapped, as is, already,” Holton said, taking up the theme. “So to say you’re going to jump out of the box right away and we’re going to audit 55 agencies in two years is a mammoth task.”

“Other areas are going to suffer,” she warned, citing controversial cuts already made in recent years to city recreation centers, pools and after-school programs.

“Something has to give!” Curran chimed in.

Stokes once again provided the note of skepticism, observing that doing an audit every four years “is almost akin to not doing any audits at all.”

“People can steal very easily over that four-year period,” he said.

Ernish v. Pratt

The frostiest moments, however, came when Ernish challenged various Pratt assertions – including the Comptroller’s contention that her office has suffered from budget cuts and the difficulty of hiring auditors away from federal, state and private sector jobs.

Baltimore’s audit department is “actually amazingly well-staffed,” compared to other cities, Ernish observed.

“For you to say we’re top-heavy or overstaffed … that is absolutely not true,” answered Pratt, who had earlier complained that in her 2013 budget she had only been given 39 of the 42 auditor positions she requested.

Houston has 11 full-time auditors, San Diego has 18, San Jose 10, Jacksonville … has 16, Indianapolis 9, Charlotte N.C. 8, Detroit has 11 … El Paso 8, Memphis 9, Seattle 8 and Denver 21, said Ernish, founder of the non-partisan group Audit Baltimore.

“Not Finished Yet”

But Pratt argued that some other challenging special circumstances make it unfair to compare Baltimore to those cities.

“Are these cities that you’re talking about …restating their CAFRA?” Pratt shot back at Ernish.

As The Brew reported in December, because of an error made by the Department of Finance under previous director, Ed Gallagher, the city is having to redo its 2010 and 2011 Comprehensive Annual Financial Report (CAFR).

Fixing that document, which is used by rating agencies to determine the city’s credit rating,  has been costly. Pratt noted (as the earlier Brew reporting states) that the city is spending approximately $700,000 to hire KPMG and Ernst & Young to correct the problem.

Fixing it has also taken the auditors, as well as Finance staff, away from their regular duties, Pratt said.

“We’ve spent over $700,000 with these outside firms,” she said, “and it’s not over yet.”

Go Slow Approach

Ernish said she does not support the current legislation (“it looks like no other city charter”) and suggested citizens petition to place a more effective measure before voters.

But the other guests said the legislation should be passed, as “a good start” or, in Stokes’ case, “better than nothing.”

“The journey of a thousand miles,” Pratt intoned, “begins with a single step.”

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