Political constriction suffocates Compton
Political mismanagement on epic scale cited by State Controller earlier this year Political woes on a scale never before seen have reached critical mass in the City of Compton. If matters do not improve significantly, the City could
Political mismanagement on epic scale cited by State Controller earlier this year
Political woes on a scale never before seen have reached critical mass in the City of Compton. If matters do not improve significantly, the City could find itself imploding and under the conservatorship of the County of Los Angeles.
Cynics and naysayers may deny this, and attempt to minimize the damage that the city has already suffered under failing political leadership, but the California State Controller’s assessment in March of this year cannot be denied.
The city is entangled in mismanagement.
The City has a General Fund deficit caused in large part by reckless overspending, pervasive internal control deficiencies, and a lack of city council oversight, according to the Controller’s review.
Of the 79 measures of internal accounting and administrative controls reviewed by State Controller Betty Yee’s audit team, Compton was found deficient in 71 — almost 90 percent.
That’s a grade of “F” on any report card.
Responding to the harsh assessment to deflect the blow, Mayor Aja Brown said at the time:
“Compton was on the brink of bankruptcy as publicly reported in 2012, and is now solvent, as currently reported,” she said. “Compton is on a firm and definitive path to recovery, which includes a new solid source of annual tax revenue, new economic development, new fiscal policies, stable senior management, and full city council support — which all occurred under my administration.”
But the controller’s in-depth audit totally contradicted Brown.
Forty-three million in the hole
At the beginning of Fiscal Year 2007-08, Compton had a General Fund surplus of $22.4 million. Three years later, the surplus had become a $42.7 million deficit due to overspending at an average of $16.3 million a year above budgeted expenditures.
In June 2014, the Compton City Council adopted a repayment plan, but over the next year, the General Fund deficit enlarged by another $6.4 million — three years under Brown. The bleeding didn’t coagulate. It kept flowing. Brown had to own that.
But Mayor Brown is not alone in the city’s fiscal management. The city manager, city controller, and entire council are culpable through a consistent pattern of disturbing mismanagement.
The Council expenditures are three times those of comparable charter cities in Los Angeles County. Where other small cities have one full-time assistant for an entire city council, Compton has one for each of its five council members. Total compensation for the mayor and city council members themselves exceeded limits in Compton’s city charter by nearly $1.3 million from January 2010 through July 2017, the state audit reflected. The review also found that all charges to city-issued credit cards were questionable because city management did not enforce its policies and procedures.
“While violating the city’s charter and continually overpaying themselves, the council’s brazen overspending contributed to the city’s financial hardship,” said Yee, the state’s chief fiscal officer. “Clearly, the city council needs to right the ship and make deficit spending a part of its past by exercising meaningful oversight of the city’s duties.”
Woeful internal controls, staff turnover
Material weakness in internal controls — such as a lack of segregation of cash-handling duties — allowed incarcerated former deputy treasurer Salvador Galvan to embezzle more than $3.7 million from May 2010 through December 2016, for which he received a federal prison sentence of six and a half years.
City Treasurer Doug Sanders must share the blame, too. He has been at the helm of this critical city department for more than two decades and evidently became too relaxed and fell sleep on duty, allowing Galvan to tip in the fiscal darkness.
Sanders must go, too — recalled or “fired” at the ballot box.
Then, there is the city controller’s office, which had seven vacancies, leading to delays in financial records and reporting, begging the question: Who else was stealing money?
Auditors also found that staff turnover and a lack of consistent leadership prevent employees from performing some critical functions. The city has had nine different city managers in seven years and has been without a human resources director for three years.
The city controller’s office has seven vacancies, leading to delays in financial records and reporting. Compton’s failure to file a financial transaction report (FTR) with the State Controller in Fiscal Year 2015-16 raised red flags that triggered this review. The city’s FTRs were submitted after the state deadline in FY 2012-13 and 2013-14, and its Government Compensation Report was filed late in calendar years 2013 through 2015. The city’s single audit report was never filed in FY 2013-14 through 2015-16.
No ‘Wonder Woman’
Since January 2015 — at the time three years on Mayor Brown’s watch — Yee and her audit team have identified more than $3.9 million in misuse, waste, and fraud involving public funds. Despite bright hopes early in her first term, she has not measured up to ‘Wonder Woman.’
Neither Mayor Brown nor any of the city managers that served in her orbit (now and in the past) qualify for distinction, except G. Harold Duffey, who fell to inside politics and shouldn’t have been fired.
The State Controller’s Audit of Compton may be the severest in city history. That Compton needs improvement is an understatement — the city needs a severe overhaul from top to bottom.
The city was “great” once. It can be great again. This can be accomplished at the ballot box.
What are you waiting for Compton?