At the City Council meeting on September 4th, a citizen got up and addressed the Council. During his remarks he talked about how two years ago the Council was working to prevent the City from having a budget deficit of over 1.5 million dollars that year. The speaker also mentioned that he and others have looked at the City’s financial records and could not come up with the same conclusions. In other words, when they did the math, they got a different answer. That, to me, is a concern.
Accounting, at it core, is nothing more than keeping a record of money transactions. You write down how much money you take in and how much money you spend. You also write down how much money people owe you and how much money you owe others. The purpose of accounting is such that two different people, unrelated to each other, should be able to take the “ins” and the “outs”, the “due” and the “owe”, add and subtract them all, and both come up with the same answer.
If that is true, how can two people come up with different answers? Either they did not have the same information to start with, or they don’t agree on which numbers should be added and which should be subtracted.
What about the annual independent audit that is conducted; wouldn’t that have exposed a problem with the City’s accounting? Not necessarily. In this case the auditor is hired, (by the city), to look at the numbers that the City has published and determine if the adding and subtracting was done correctly; does “line A” ,minus “line B”, equal “line C”. These types of audits DO NOT check to see if all of the numbers that should be there, were included. In other words, the auditor only looks at what they are given.
What seems to be needed is a different kind of audit. One where the auditor goes in and “digs up” the financial records, and doesn’t just take what they are given. It needs to be someone that is not biased either for or against past or current city administration, nor past or current Council Members.
