My Fellow Council Members:
Per your email concerning SBOA findings, the Board has broad authority in regards to who performs GASB audits (133-A, yellow book) and is the authority in granting outside CPA firms which, in my opinion, would cost the City and Utility upwards of $250k, and, when asked, during the exit conference, out of hand, rejected the request.
In regards to the comment that the City Council should have over-sighted the process is expected and normal under the separation of powers doctrine. Congress over-sights the executive branch, but, they have the GAO at their disposal and, of course, subpoena power. Up to now, no other City Administration has given the City Council funds to perform their apparent responsibilities. Per my request, in July, before this unfortunate situation was exposed to any member on council, including me, my request for Council City funding was honored; thus, we now can be expected to do our separation of powers responsibility. During the salary debate, you probably remember that the City has an internal auditor which reports to the Mayor and the controller office. Surprisingly, the SBOA does not mention the failure in reporting this disturbing state of affairs, maybe she did, but, regardless, nothing was done, no request for any additional appropriations from the Mayor to help with the exit of the only CPA due to underpay, no qualified replacement, and, obviously, lack of planning and over-sighting by Tyler and our contracted IT vendors. Thus, my three year concern of the IT situation and the requested assessment went un regarded by the past administration. You and Missy both supported my IT concerns over those years. During our meeting with Mark Rolley, weeks ago, you, Jonathan Weaver, and I heard the issues, seemingly uncontrolled acquisitions of software and peripherals and lack of involvement of IT in the process, among other issues.
What corrective actions by the Council, in my opinion, should be suggested? Well, first of all, the internal auditor needs to report to the council, not the executive branch. In corporate American, the IA reports, generally, to the board of directors, we should be the board of directors in the public since. If she had knowledge, and should have, her failure of reporting the condition of the accounting reporting system would have repercussions? Obviously, this smacks of either a cover-up or incompetence, neither one not inviting. If she properly would have informed us, would her job be in jeopardy? Second, as an ordinance, a required IT Assessment every three years including the establishment of a central authoritative committee concerning IT, and finally, our own over-sight coordinator, which I have nominated David Garrett. He is a CPA, former CFO of Pacific-Press, has IT project credentials, (Keller-Schraeder), probably should be on the short list for the CIO position.
We were all elected to oversee the affairs of the City, to appropriate funding were critically necessary, in safety and the supporting functions, etc. To execute those functions, it is the purview of the Mayor. For any one of us to perform those duties is not in the separation of powers doctrine. For instance, you are a cardiovascular surgeon, so, if our employee healthcare issues drive our costs upwards, our you responsible? Or, as we all are aware, this City has from time to time, entered into unfavorable contracts, would Dan McGinn, Connor O’Daniel, and Stephanie Brinkerhoff-Riley who are all attorneys, be held responsible? and likewise, as a CPA, would I be held responsible for the controller’s office failures. We all happen to be ordinary citizens elected to see to it that our community is a good place to call home and where we see the necessity for corrective action, we will respond. With this said, I strongly urge you and our colleagues to consider the aforementioned corrective actions. If you and others have additional recommendations, please bring forth.
Thanks, John
POSTED BY THE CITY COUNTY OBSERVER WITHOUT OPINION, BIAS OR EDITING! POSTED WITH PERMISSION OF 5TH WARD AND BUDGET CHAIRMEN AND CITY COUNCILMAN, JOHN FRIEND, CPA.
This “internal auditor” that you speak of is no CPA. She barely has a good enough diploma (GED) and is considered the computerized accounting system “expert” in the Civic Center.
You are correct in what an IA should do but you are talking about someone that can’t walk and chew gun at the same time.
It’s time for Mr. Friend to serve the political wine.
People know that Weinzapfel and Winnenke are extremely jealous of Councilmen John Friend because the taxpayers finally trust what he says when it comes to money issues.
When Mr. Friend took on Vectren and Weinzapfel over issues of taxpayers concerning money issues and won thats when people began to believe in him!
Please Councilmen Friend don’t back away from the above self serving political dogs! We support what you are doing for the taxpayers because it is about “good public policy”!
Friend for the next Mayor of Evansville!
He’s honest, intelligent, dedicated and a hard worker.
Go “Chicken Fat” John Friend, CPA lets lose the fat in the 2013 budget!
I am sorry here, but how many financial committee meetings have you conducted since the ledgers first became unreconciled? It does not take a “budget” to inform your fellow councilmen and councilwomen that the city’s financial books can not be reconciled.
You say that before July this situation was unknown to you and the rest of the city council. I do not see how that could be possible given the length of time the books had gone unreconciled prior to July of this year.
The city controller appears in front of you at virtually every financial committee meeting you conduct. Are you asking us to believe that you and Mr. Lloyd have not been discussing the status of ledgers that are required by statute to be reconciled monthly, knowing that he could be held personally responsible for any fund deficiencies each month?
The financial data of the city, regardless of who the IA reports to, should be available to, and shared by, both the executive and legislative branches of the city and the mayor should have his representative in attendance at every financial committee meeting of the city council, in my opinion.
This is a very grave situation we have been facing here for the past 21 months and this and the prior SBOA audits confirm that fact.
To what degree the city’s external IT department has played a role in exacerbating this problem I do not know at this time, but I do know they have a contract with some sort of performance standard written into it, and if not you need to fire the city’s legal counsel.
The local print media appears to have little interest in this story thus far, but I can assure you that it is going to get a much wider audience soon.
The best path here is for everyone to tell the truth, let the chips fall where they may, then to pick up the pieces and move on with a reformed process.
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Pressanykey are you the wife of the Mayor putting blame on Friend and Lloyd?
Friend and Lloyd can not hold the job positions they do and dodge some responsibility for what happened. It comes with the job.
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Leave JOHN FRIEND and RUSS LLOYD along!
Put the political heat Weinzapfel and Winnenke the “bad policy brothers”!
Most people know that Winnenke and Weinzapfel are glued at the hips!
Agreed leave Friend and Lloyd alone.
Thanks to City Councilmen, John Friend,CPA for standing up for the taxpayers of this city.
Shame on you Russ Lloyd, Jr. and Mayor Winnenke.
Members of the executive branch and it’s staff appear in front of the Council all the time. Members of the Council are free to meet with employees of the city any time they wish and those meetings are usually honored.
All it would have taken is a few probing questions to discover that the system was a disaster. Blaming it on an audit is silly. Go out and ask a few questions and the follow up on what you learn.
It’s not that hard.
Dear Press
If it wasn’t for the auditors at the SBOA, who requested a meeting with me in July, I wouldn’t have know the problems existing. I immediately emailed our Council President concerning the issues. The severity of the situation did NOT come from the Administration, but, from the auditor. This same auditor has performed our City’s audit for over 20 years. She has never, while I have been on the Council, contacted me concerning any issues during those audits. She told me what is amazing while in the Civic Center performing the 2010 audit, during April and May of 2011, the controller NEVER indicated to her the problem with reconciling the funds. She also indicated that Harding Shymanski CPA’s were engaged to attempt to reconcile and was unable to do so. They NEVER contacted any Council Member. In addition, the auditor indicated that the Utility was in the same condition. At that time in July, I met with the CFO of the utility together with Allen Mounts, the Director to determine the level of issues. Again, it was the stated “Software Conversion Failure.” I was informed, Umbaugh & Associates, CPA’s were also engaged during 2011. During the SBOA exit conference, the supervisor of SBOA stated “you (Administration) were not forthcoming as to the conditions of your records.” This was the SBOA response to the Administration’s request for additional time to reconcile and reconvene the audit. They (auditors) indicated “if you would have been forthcoming, we would have rescheduled to give you the time to correct.” This conference was conducted on August 23, 2012 at 4 p.m. All of the attendees were strictly instructed by the SBOA NOT to publicize the findings until the report is released under regulations. Finally, I refer you to the final paragraph of my correspondence to Dr Adams and copied to all Council Members.
Councilman Friend
I want to state up front that I have no personal argument with you as an individual. My argument concerns your performance in your capacity as Chairman of the Finance Committee.
I do not think I can say it any better than the person who posted as “IG” immediately prior to your post has stated. In fact, that is exactly my feelings on the issue.
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I’m not trying to point a finger here….but the statement Mr Friend made quoted below really doesn’t jive with the response by the city listed in the SBOA quoted below Mr Friends quote.
While I can understand the stance of the SBOA not wanting details released prior to their audit report publishing, it still seems highly illogical that the council finance chairmen didn’t know of this problem in 2011, especially if the statement the city made to the SBOA in their response is true.
Mr Friend’s quote….
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“If it wasn’t for the auditors at the SBOA, who requested a meeting with me in July, I wouldn’t have know the problems existing…”
Excerpt from the city’s response to the SBOA findings….
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From Finding 2011-1 (page 61/62)
“When the City of Evansville initially converted the previous obsolete computer financial accounting system to the new Tyler Technology financial accounting system effective January 1, 2011 the City Council was informed of the progress on a sporadic, as needed basis.
The City Council Finance Committee Chair regularly consults with the City Controller and Mayor about financial issues. The City Council Finance chair has also consulted occasionally with the State Board of Accounts field auditors on the City 2011 engagement.
As a step to improve communication and City Council oversight, the City Controller will initiate regular consulting with the City Council President and City Council Finance Committee chair as to progress on the implementation of the new set ups, pooled cash system and bank reconciliations using Tyler Technologies and the external financial consultants effective September 1, 2012…….
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The first two paragraphs kinda’ shoot a hole in Mr Friends statement, but then the third paragraph kinda’ reinforces the idea that we will now talk to each other (city council finance chair and controllers office) giving the implication that they haven’t been doing so on any type of regular basis…just seems kinda’ weird for Mr Friend to not have been at least in the outer ring of the loop in 2011, I mean they did pass a budget for 2012 which means they did get reports from the controller’s office, how can you do that and not have a idea that the accounts were not reconciled for 2011?
I just fail to see how this was kept under the radar from the city council and specifically the finance chair for a full 21 months, seems almost imposable to keep a secret in the civic center, moles knew it was going on way before Mr Friend did?
JMHO
You left out the possibility that those “sporadic and as needed” updates were smoke and mirrors presentations designed to deceive. It could just be that SNEGAL (sneaky by legal) was in charge of the reporting.
LOL…well yes that is a possibility or probability if everything is as it would appear to the average viewer, it’s the length of time (21 months), the passage of the 2011 budget, the fact that the finance chairperson is a registered CPA that deals with this stuff on a daily basis in his private business (he knows the correct questions to ask and the correct responses he should get).
With that being said, the other thing that bugs me is that the council chair should have a direct connection to the controllers office and a full packet of info related to the city finances on a monthly basis, things like months and months of not being able to reconcile accounts should be discussed at regular finance committee meetings along with that info being shared with the common council in their meetings.
Again this is all academic from a laymans point of view while trying to apply logic to situation without all the facts or knowing the players and their intentions.
Bottom line is that SNEGAL certainly played a role in this fiasco the uncertainty is just who was playing the SNEGAL card and for what purpose.
JMHO
Perhaps the Civic Center is inhabited by a herd of SNEGALS. We agree that the probability that a couple of people could keep this a secret for 21 months is very small.
Did former mayor Jonathan Weinzapfel violate Indiana statute by handing over the government of the City of Evansville to incoming mayor Lloyd Winnecke with the financial ledgers unreconciled?
If so, what is the penalty for that action?
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Press, Weinzapfel violated that law 12 times by not reconciling at the end of each month the last of which was December 2011. Winnecke has technically violated the law too but Weinzapfel made it impossible for him to comply. Whatever he penalty is, Weinzapfel should be serving that sentence 21 times.
“Press, Weinzapfel violated that law 12 times by not reconciling at the end of each month the last of which was December 2011.” (Nobama)
* * * * * * *
Correct, and that is certainly bad enough, but handing the city over to a new incoming mayor in that condition takes it to another level in my estimation.
There simply has to be some sort of penalty for that, otherwise we could have a total collapse of the governmental system here in Indiana.
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“For any one of us to perform those duties is not in the separation of powers doctrine. For instance, you are a cardiovascular surgeon, so, if our employee healthcare issues drive our costs upwards, our you responsible? Or, as we all are aware, this City has from time to time, entered into unfavorable contracts, would Dan McGinn, Connor O’Daniel, and Stephanie Brinkerhoff-Riley who are all attorneys, be held responsible? and likewise, as a CPA, would I be held responsible for the controller’s office failures. We all happen to be ordinary citizens elected to see to it that our community is a good place to call home and where we see the necessity for corrective action, we will respond. ”
——————–
Phase two (a) – (deflection)
So going along with that line of thinking what separates any council members from the common rabble? If your chosen profession in life isn’t at least a attribute or quality that should help you perform certain aspects of the city council gig because of a defined level of expertise in that area what actually makes John Friend CPA any better at chairing the finance committee than lets say Missy Mosby?
To blow off the responsibility by making parallels to Mr Adams MD or Mr O’Daniel ESQ life occupation’s as not being relevant in their decision making process because they would have to take ownership of the problem as their own in order to do so?
Maybe I’m missing something here, but if Mr Friend didn’t know this was a problem until July or August of 2012 and he was the finance chairman for the council for the entire 2011 term of office there is a serious communication problem that had to be intentional (don’t these people ever talk to each other?), which begs the watergate question of “what did you know, and when did you know it?” and claiming “Executive privilege” isn’t a option.
(disclaimer…while it may appear that I’m singling out Mr Friend I’m not, it just would seem that the responsibility would fall on the council finance chairperson to be in the loop so to speak with the city controllers office…maybe not, logic doesn’t always follow a logical path when you bring city government into the mix)
JMHO
Could it be that Mayor Weinzapfel knew about this along with the Collins girl and intentionally kept the City Council uninformed? That seems to be the only possible way this could have happened.
Winnecke’s statement was that he learned of it early this year. That makes sense since Lloyd would have figured it out when he was trying to balance the January books. Friend said he didn’t know until the SBOA auditor told him this summer. That makes sense too as this is the first audit to get the SBOA death penalty.
Lets take Winnecke, Lloyd, and Friend at face value until the hearings start then test their statements with some serious questions.
It is save to assume that the Weinzapfel Administration and former Controller Jenny Collins not only did this but covered it up. The unanswered questions are only about how long and how they were able to do so.
Clearly former CIO Matt Arvay and the Rolley Consulting firm knew this and helped Weinzapfel keep this suppressed. No wonder John Friend got so much push back on trying to audit the IT department. The old puppetmaster himself (Weinzapfel) was working his magic with his republican buddies on the County Council to keep the audit from being funded.
How about the fact that the prior Controller who made the decisions which led to a disclaimer WAS NOT A CPA! That’s where Pretty Boy John and this Council really messed up. Surely they could have found a qualified CPA for the kind of pay that the Controller’s position offered.
The last paragraph of Mr. Friend’s letter attempting to distance council members from responsibility or accountability for operational performance issues gives testimony to why the proposed consolidation is unwise. If a council is to simply sit back and observe and report rather than engage, the wool will be pulled over their eyes more and more by a strong mayor organizational logic. If ever there was a reason to vote “NO” on consolidation Mr. Friend’s last paragraph further reinforces it. I, for one, acknowledge my founding father’s wisdom in a form of government with clear responsibilities for checks and balances. Further, when I review Mr. Friend’s or other candidates for office I see them brag about their credentials as a substantial reason they feel they should earn my vote. If I shouldn’t expect a council person to utilize their specific training and expertise to the benefit of the office they seek or hold, then to advertise that expertise as a reason to vote for them is false.
To reference Dr. Adams background as a heart surgeon and suggest it places no similar expectation on him is a false analogy. I don’t expect Dr. Adams to crack a chest nor do I expect Mr. Friend to make each journal entry on a ledger. But I do expect that Dr. Adams would present to the council dialog a specific expertise regarding operational oversight and funding request reviews of employee health insurance coverage options, operation of the coroners office, key categories of emergency preparedness, etc. Thus, to expect Mr. Friend to bring specific oversight expertise to proper accounting, its oversight, and assurances that twelves times a year he sees and reviews reconciliation submissions would not appear to be an overly great expectation of the council’s finance chairman.
Distancing your government from your vote is a bad thing; plain and simple. Ask yourself if you are engaged enough in your own government to feel you know what is going on and can fully monitor any abuse or detect any shenanigans? The likely answer is NO for the vast majority and that is why you elect people with what you believe to be specific expertise and skill sets. You then expect them as a legislative body to be engaged enough to not only detect but correct the day to day executive wing’s implementation of the public’s will as expressed through their vote. The legislative body being closest to the people is to respond by laws and directive resolutions that give clear marching orders for the executive mayor to implement. In local government this is the council you want close to you and to be directing and overseeing the mayor. Mr. Friend’s last paragraph demonstrates the current Evansville City Council does not understand that fully. An issue suggesting council members be changed. The proposed consolidation plan creating even further distance from the people’s will. Executive oversight and direction by the will of the people moves further toward the existing failed local government in this community. VOTE “NO” and at the same time, vote all these clowns out of office who don’t understand why they are entrusted with your tax dollars in the first place.
What does a Finance Chairman do if not keep tabs on the finances of the City? The Finance Chairman should be in the loop on the monthly reports. If not, he should call those that are into the City Council meetings regularly and get updates and ask questions.
The answer to your last sentence is because the average Evansville voter either stays home or is too dumb to make good choices. It is sad.
Day #5 of Audit Gate and I just saw Jenny complaining about the State Board auditors again. It’s a broken record that it getting old but she’d be wise to stop it because the State Board is back every year.
Jenny keeping her job is more proof that if you work for the City and f__k up, you move up!
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