Letter: Why No CPA’s on the Audit Oversight Committee?

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At the last City Council meeting Michele Monda spoke on the need for CPAs on the Audit Oversight Committee. This committee oversees the audit of Laguna’s $100 million budget, our tax money, but not one CPA is to be found. Currently there is a writer, Deputy Chief of Police, real estate investor, etc. City Manager John Pietig appears to believe no CPAs, qualified experts or audit experience is necessary. City Council, elected to represent and protect residents, was alarmingly silent. None of them are CPAs, and they don’t know which rocks to look under either. If you don’t know where to look, you definitely won’t find anything. That’s why training and expertise are essential to the committee.

In response to Ms. Monda, the city manager defended this lack of true oversight, stating the city’s outside auditors have CPAs. Yes, but this audit firm was hand-selected by the city manager and is paid by the city, a cozy multi-year relationship. Not one CPA on city staff either. City Treasurer Laura Parisi is a CPA, but she’s not allowed any input—why?

Even the outside audit firm found many issues with the city’s finances, but City Manager Pietig downplayed the adverse findings. Perhaps most egregious is that ending balances did not agree with beginning balances. Who is holding the city accountable? Certainly not the city itself, nor the Audit Oversight Committee.

Why is the city manager seemingly afraid of CPAs/auditors on this committee?  There should be at least two CPAs to give the committee legitimacy and ensure our money is handled properly and transparently. Committee meetings are open, but there is virtually no public input allowed. The committee is comprised of the same Measure LL Oversight Committee members, rewarding those who supported the LL tax increase. Not a single committee member opposed the tax increase. Seems like putting foxes in charge of the hens. None were vetted to oversee a $100 million budget.

Committee findings will be presented on Feb. 4. Are they an effective oversight, or rubber stamps without the training and experience to know which rocks to turn over? If rocks are turned, will they know what they are looking at? Will the city be held accountable for deficiencies in previous audits? Why is the city afraid of sunshine on the books?

Jennifer Zeiter, Laguna Beach

 

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4 COMMENTS

  1. Thank you, city watchdogs for your expressed concerns and salient points made in this LTE regarding the concerns that Michele Monda brought before the City Council and City Manager. It is a disappointment to hear that the City Council and City Manager would not take precautions by requiring that the Audit Committee hold balanced seats, without any CPA or required formal report to city by our own elected CPA, City Treasurer?? The same CPA City Treasurer was elected despite receiving limited endorsement by City Council. What is going on down at City Hall? Unfortunately, it appears that the foxes are currently seated comfortably guarding the hen house enjoying the free lunch, without much of a challenge. Thank you, clever watchdogs!

  2. I totally agree. I believe our City leaders are being negligent in regard to allowing the oversight of our $100 million annual budget by the Measure LL Audit Committee. No CPA’s sit on this committee and members are not qualified to oversee our annual city budget. Their role is reviewing city spending at year-end after to verify that it was spent as designated. Period. And this Measure LL tax designation was purposely kept quite broad so monies allocated cannot be challenged. I encourage residents to see the documentary film “All the Queen’s Horses” about the small City of Dixon whose residents were robbed of $53 million by the City Controller/Treasure because the CIty (officials and manager) did not have the proper internal/eternal oversight in place. I’m not suggesting we have this type of issue in our town but the main message of the film is that government revenue and spending must be heavily monitored. Due to the amount of money a city takes in and the multiple allocations and departmental movement of revenues within a city government process, it can be difficult to track, monitor and suseptable to possible mismanagement. The sad story of Dixon could have been avoided. No disrespect intended to the community volunteers who sit on the Measure LL Audit Committee. I thank them for their time and efforts over-seeing this designated budget. But not our entire City budget. Let your City Council Members know that you want every precaution in place and vetted qualified Certified Public Accountants to properly oversee our $100 million dollar City budget. Nothing else should be acceptable to taxpayers.

  3. What can be done about this besides writing to the CC and not hearing anything..This is so wrong, where is our money going? Why is the city not being managed properly…seriously blows me away! Thank you Michele and now Jennifer for taking your time and research . I find it difficult to believe there are not laws in regards to this. We all need to write the city manager and CC

  4. Barbara, a handful of residents attended and spoke at the Feb 4th CC meeting on this issue requesting that a CPA or financial expert (or special matters expert) be appointed to serve on the City Audit Committee. Although the CC members did not refuse the request they also did not show full support or agree with the public that it was necessary. They merely stated that they weren’t opposed to it and would consider it if and when a committee position needed to be filled. So next to nothing was done that solves the financial oversight qualification concerns of residents. It is truly painful to watch a group of elected representatives muddle around topics and not resolve very simple issues and constituent concerns. Guess this only happens when they feel pressured by dozens of people attending and speaking up. The question remains: what possible rationale they could have for not appointing residents with financial expertise to our internal audit committee? Course, those who expressed their concerns for selecting members with actual finance related expertise on the audit committee were subjected once again to City Clownsil Peter Blake questioning their motives and discounting their opinions. Residents continue to be harassed at CC meetings by Blake as witnessed during the boards and commissions applicant interview meeting when he verbally attacked some returning applicants and this behavior was addressed by the Mayor. Embarrassing representation by a city official and supposedly role model, since volunteer applicants and their families and friends of all ages were present to see the government resident volunteer participation system in action. Hopefully they learned how “not to behave in public” as they serve to give back and improve our beautiful city.

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