Grant Thornton Reports
A couple months ago the City of Fullerton hired Grant Thornton to investigate a handful of financial transactions that resulted in an vast overstatement of the city’s General Fund.
Last night they reported on Task 1: investigating the awkward General Fund balance fuck up.
As expected was the conclusion that no nefarious intent was involved. Just some good old fashioned negligence and/or incompetence (these were not used by Grant Thornton who was completely diplomatic).
But all you had to do was read between the lines and the conclusions were, and are, damning.
According to the consultants these few transactions were the only thing they looked into; they were not hired to perform a full forensic audit. Well, okay. But the conclusions that they drew, and that informed their recommendations should have been perceived as a serious indictment of how the City’s finances operate, were accepted by a clueless city council without a whimper.
One transaction alone, the $2.9 million from redevelopment, should have sufficed to alarm all involved. The funds were moved without a concomitant debit to at least a temporary holding account – a basic principle of accounting called double entry book keeping, a fundamental concept of Accounting 101. It’s only been around for 600 years.
The big recommendation was to hire a competent Chief Financial Officer – a CPA knowledgeable in government accounting. There’s another $300,000 per annum. It seems like the budget and reporting reforms recommended by our consultant may not be able to be applied to the upcoming budget due to lack of time, which just seems so typical of Fullerton Futility.
The little that Grant Thornton did delve into suggests a fundamental failure of practices and procedures that is the result of years, if not decades of organization entropy because of lack of managerial leadership. When we consider the completely unqualified City Managers like Chris Myers, Joe Felz, Ken Domer, and Eric Levitt – appointed for reasons of political maneuvering or convenience – things start to make more sense. Combine that with the fiscal and budget responsibilities being rolled up to Administration Directors whose professional accounting abilities were (and are) dubious, you get a process running on inertia.
Naturally, nobody at the meeting had the courage to say any of that, although the Grant Thornton folks sure must have spent a lot of time trying to figure out how not to say it.
Grant Thornton has decided that someone else should perform Task 2 – the generation of revenue to bail the City out of its fiscal embarrassment. They say it will save the City money to hire somebody else with a better “wheelhouse” to perform this task, a generosity foolishly lauded by one councilmember, but that begs the question of why Grant Thornton was hired to perform the task in the first place, a question whose answer will not be forthcoming.
My guess is that GT doesn’t want to have anything to do with talking about new taxes and there’s an end to it.
This makes you wonder what else in City hall is on autopilot.
This is the Payne Stewart Effect. The plane just keeps going until it runs out of fuel.
“…the Grant Thorton folks sure must have spent a lot of time trying to figure out how not to say it.”
That report was about the most condemning non-accusatory thing imaginable. Of course nobody on the City Council will have learned a damn thing. And the new CM is just as responsible as his predecessors. Tell me again – why was he hired?
He was hired because no legitimate city manager would ever go work for Fullerton.
It’s Fullerton. No one learns anything.
Correct me if I’m wrong, but didn’t a recent former council member actually have an accounting degree? Not to lay it on that person, but how is there not some sort of annual forensic audit to catch errors like adding $ 2.9 million in phantom assets? (By the way, take a look at the name of the Redevelopment holdover that appears next to that entry in the presentation).
And, don’t we have a Finance Director already?
I’m waiting for the video to be posted (if it ever is – I had to watch via zoom last night) to get some screen grabs.
The 2.9 million, or at least a large part of it, was a phantom asset. Sold for a loss, apparently.
There is an interim Finance Director who I wouldn’t hire to walk my dog. He was probably hoping for a promotion. He won’t gt it now, even in Fullerton.
If you mean Whitaker, I think he was some sort of book keeper. It didn’t provide much oversight ability.
If Jung was interested in good government (he isn’t) he would recognize the deficiency (he won’t).
Whitaker couldn’t balance a ball on his nose and bark like a seal.
Jung won’t what (exactly)? Nick Dunlap, Jamie Valencia, Shana Charles, and Ahmad Zahra could exercise good government if Jung fails to do so. So why aren’t they (exactly)?
Jung won’t recognize the deficiency in staff competence. He’s already backed staff about the hugely embarrassing funds screw up. Huge mistake. There may have been no malfeasance but there was basic accounting failures.
I dunno. Jung may not have said anything, but I heard nothing from Charles, Valencia, or Dunlap. Only Zahra kicked screamed and pouted for good theater because he is such a good actor.
True about “Dr.” Zahra. His performance was more Bad Theater. The others were silent, to their discredit.
The issue goes directly to leadership failure: incompetent City Managers who rise through the ranks (Felz/Domer) appointed by inept and just plain stupid councilmembers.
As the post points out City Hall has been adrift for decades and the failure to apply basic organization management has been obvious.
Whenever somebody thanks “staff” for all its hard work you can bet the accolades are hiding a fuck-up.
The fact they don’t have a CPA on staff is mind boggling in so many ways.
The threshold needed to become a CPA is not that high; it’s a Bachelor’s Degree + 30 college credits + passing the exam. No Master’s Degree needed.
Not surprisingly, the losers who do handle the City finances today get paid the same as a CPA should without any competence, ability, or experience to show for it.
In local government there is always a hiring bias toward those who are already in the stable: a known quantity. The Peter Principle kicks in. And just about the time the disasters are unfolding, the perp retires with accolades and a massive pension for life.
No, the CPA isn’t the issue.
Hiring a city engineer WHO WASN’T AN ENGINEER was the worst one by far.
True. She mailed out bills in the city of Pomona. And the Observers bemoaned her departure, of course. Meg Something.
Months ago Council had agreed to hire Grant Thornton for phases 1 AND 2 AND 3 with phase 3 contingent upon the results of 1.
So what changed? They felt fully confident in selling their services for phase 2 for several months on end and staff sold them to Council on that $2.9 screwup so that’s not the issue.
Doesn’t Sunaya’s husband work for Grant Thorton?
Does he? Do you have any information on that?
Pretty sure that was confirmed here and elsewhere several weeks ago. Sunaya needs to be fired.
I missed it. Where was it discussed?
I’m trying to remember if it was here or from elsewhere but I’m 99% sure that it’s true. I’ll keep looking.
Truth be told, there isn’t a single qualified person on the entire City of Fullerton staff or City Council. None of them would rank about the bottom quartile in their “profession” when compared to their peers.
The buck stops with the City Council members who make the City Manager hiring decision — they are 100 percent culpable for the incompetence, mismanagement, errors, and overall pitiful state of the City of Fullerton.
True. Domer was chosen as Fitzgerald’s new bag man, after the drunkard Joe Felz’s Wild Ride.
I can’t imagine why ANYBODY thought Eric Levitt was a good idea, but at least 3 of them did. I’m guessing Quirk-Silva, Zahra and…?
It could be worse. Fullerton could do what the bigger idiots in La Palma did and hire a former (and totally unqualified) city council member to be the City Manager. That place is a total clown show — worse than Fullerton — and that ain’t easy.
Where is the rest of the Hunt library money?