Fiscal ineptitude: Compton city government creates blueprint
The State Controller’s report paints Compton’s elected officials as incompetent, greedy, and stupid
Compton City Hall. Photo source: City of Compton website
Compton audit analysis, part I: ‘Blatant incompetence at all levels of city government’ doesn’t begin to describe the fiasco in Compton
Maybe the City of Compton is a banana republic, after all in the grip of economic exploitation by city officials. Accordingly, the city is fiscally unstable with stratified social classes — a ruling political class or oligarchy, and a subservient working class, who report to their jobs daily and count on the city’s plutocracy to handle the city’s business.
If the State Controller’s report is the last word — and you’ve got to believe it is — Compton’s elected officials are awash in incompetency, greed, and stupidity.
Incompetency, because the mismanagement of civic protocols has been wanton.
Greed, because the squander and misappropriation of public funds — much of it into their own pockets, shows gluttony without shame.
Stupidity, because they thought they could get away with it — even in the face of state government oversight, no less, and even a few persistent council chamber gadflies, to whom we salute.
The aforesaid may be strong language, but most will agree that maybe the characterizations could be even harsher after we dissect the fiscal shenanigans that have transpired over the past year.
According to the State Controller’s office, the city’s administrative and internal accounting control deficiencies were serious and pervasive; virtually nonexistent.
The deficiencies resulted in the following findings that the city should address and correct, according to the controller’s report:
- A deficit fund balance in the General Fund;
- The city may have paid council members salary compensation in excess of the amount allowed by the City Charter;
- Material weaknesses in internal control resulted in the city’s losing $3.72 million;
- City Council expenditures are substantially higher than those of comparable charter cities within the Los Angeles area;
- City Council expenditures of city funds on special projects and events exceed the approved budget;
- City officials failed to comply with purchasing procedures and contracting requirements;
- The city failed to exercise oversight over its financial and operational activities relating to contracted services;
- The city failed to exercise adequate control over expenditures charged to city-issued credit cards;
- Bank reconciliations were not performed, reviewed or approved in a timely manner;
- A lack of segregation of duties;
- A lack of control over the city’s Petty Cash Fund;
- The city’s fixed assets were not properly and accurately accounted for;
- The city’s Administrative Policies and Procedures manuals were incomplete and outdated;
- Turnover and lack of consistent leadership have hindered operational stability;
The state controller concluded the following about the City of Compton’s Administrative and Internal Accounting Controls:
- The city was unable to produce financial statements on a timely basis;
- The city lacks adequate staff performing critical functions;
- The city failed to implement correcting procedures to prior-year audit findings;
- The city lacks an established audit committee.
Compton city officials implicated in the gross deficit spending that essentially accounted for the fiscal morass includes the following persons:
It’s not a one-person “blame game,” as some have asserted. We will deflect some of the criticism from City Manager Rhambo and Controller King, as their tenures have not been long enough to have sufficiently contributed to the wide-ranging mismanagement.
Of the 79 control elements evaluated, the state controller found that 71, or 90 percent, were inadequate. You might wonder how a 90 percent failure rate could be possible. A more detailed review of the day-to-day, weekly and monthly deficit spending habits of unchecked governance will reveal just how it could happen and did happen.
Let’s begin with the city council.
The state controller’s review of accounting and reporting of salary costs revealed that the city may have overpaid salaries to council members, including monies allowed for car and phone expenses.
We’ve travelled this road before when the Los Angeles County district attorney threatened the mayor and council with criminal charges and prosecution if they continued to compensate themselves over and beyond what was legally permitted by the City Charter.
The state controller extracted salary costs for council members for the period of Jan. 1, 2010 through July 31, 2017. This only pertains to the current city officials from 2013 on, after Mayor Brown took office.
The state controller deciphered the salary and expense records from the city’s payroll records, disclosing that during this period, council members were compensated a total of $1.56 million. Section 504 of the City Charter provides for monthly compensation of $600 to the council and the mayor, and reimbursement for necessary travelling and other expenses when on official duty out of the city on city business.
The City Charter does not stipulate exact amounts of compensation for car and cell phone allowances, and serving on various boards and commissions, leaving it up in the air as to how much council members can claim as legitimate compensation, but overall the state controller determined that the city may have paid the council $1.29 million over and above the amount that should have been paid.
The following schedule shows the breakdown of questionable compensation paid to council and mayor for from 2013-2017:
In 2014, the allowable limit by the City Charter for straight salaries (not allowances for car and cell phone) was $36,000. The amount paid, including car and phone expenses was $187,750.
In 2015, the allowable limit on salaries (not allowances for car and cell phone) was the same, $36,000. The amount paid, including car and phone expenses was $113,225.
In 2016, the allowable limit on salaries (not allowances for car and cell phone) was the same, $36,000. The amount paid, including car and phone expenses, saw a reduction to $41,350.
In 2017, the allowable limit on salaries (not allowances for car and cell phone) was the same, $36,000. The amount paid, including car and phone expenses, saw a reduction to $21,300.
Even with the 2016-2017 reductions, the deficit spending from 2013-2017, from the time Brown won elective office in Compton, has seen a combined overpayment of salaries and expenses of $363,625.
This is just the beginning. There is more to come.