Wednesday, September 5, 2012

Audits? we don't need no stinkin' audits!

I’ve been working on a new informal series called WHAT SAN DIEGO DOESN'T NEED.  Here's the first installment, to be followed by short pieces on other things our city doesn’t need, like Newspaper? we don't need no stinkin’ newspaper…no stinkin’ pensions…stinkin’ lawsuits...scandals…moral terpitude...and so on.
Today it's audits.

My mother introduced me to audits when I was a child by way of specific instructions on how to deal with the outside world.  It was the ordinary dose of Be careful crossing the street and Don’t talk to strangers -- until one day she catapulted me into a grey zone of 'little white lies' with a new caveat: Honey, whenever anyone asks what daddy does for a living don’t say bookie. Say he’s an auditor…just say he does hotel audits.

Now it’s your turn for confession.  Raise your hand if you know what an audit actually is.  Double points if you can name San Diego’s City Auditor.  Jackpot if you have any idea how much trouble our city can/did get into when the City Auditor doesn't/didn't do his job.

To start you off here’s a quick definition of the term audit: an official examination and verification of accounts and records, especially of financial accounts.  Big and small businesses, brokerage firms, banks, individual taxpayers, educational institutions, private and public corporations and, they are all subject to routine and/or special audits.  Cities are no exception.

Eduardo Luna has been San Diego’s City Auditor for the past five years.  You may have seen his name in the news recently when one of his audit reports was challenged by the mayor.  You may have read that he was chastised by mayoral candidate Carl DeMaio for bringing a negative report to public attention.  Maybe you came across his dissent from the city’s positive fiscal analysis on last June's “pension reform” measure (Proposition B).  Luna claimed that financial savings touted by the proposition were exaggerated and misleading.

But even if you’ve never noticed San Diego’s soft-spoken, non-confrontational City Auditor, you should be aware that his job responsibilities are crucial and far-reaching.

Here’s what the City Auditor is supposed to do for the city: 
  • conduct performance audits, management audits, compliance audits, and special investigations to determine how well the city is doing its job and how it could improve
  •  eliminate waste and fraud
  •  assess and report on city operations, services, and contracts
  •  examine and verify the city’s financial accounts and records
  •  open the city’s books to public view
  • be the taxpayers' watchdog, the people's advocate
It is painfully clear that many past City Auditors fell down on the job.  An objective assessment of San Diego history reveals a longstanding political culture that exalts the art of ‘little white lies’ and routinely squashes internal controls and public disclosure.  

The truth does and should matter in local politics.  But the San Diego complex has traditionally stifled attempts at open good government and excommunicated the occasional individual who ventures forward to challenge the status quo.  To this day, political fiction still trumps the truth.

You need look no further than the pass Mayor Sanders received when he announced that the city's financial problems were over.  Who would be so petty as to criticize a genial, termed-out mayor for falsifying financial information and deceiving the public?  After eight years of sweeping truth under the rug, a fella's entitled to a whopper before the door gets shut behind him, isn't he?

And you need look no further than the ease with which the person who wants to be the next mayor, Carl DeMaio, has mastered the art of misinformation and falsehoods from his seat at the city council to the campaign trail.  

Even when -- in a stunning betrayal of the public trust -- Carl DeMaio undermines public accountability, transparency, and open government by 'encouraging' the City Auditor to hide critical or negative information from the public and deliver only positive assessments in future audits, his hypocrisy goes unchallenged.  A fella running for mayor is entitled to be two-faced, isn't he?

Let me refresh your memory about what can happen when a City Auditor is coerced into hiding facts and deceiving the public.  In a 2006 report by a team of financial experts investigating corrupt practices surrounding San Diego’s pension debacle, former SEC chairman Arthur Levitt laid the blame for the financial crisis that continues to destabilize our city on “San Diego officials (including a previous City Auditor, who) fell prey to the same type of corruption of financial management and reporting that afflicted municipalities such as Orange County, and such private sector companies as Enron...(and) demonstrated willful intent to deceive the public…”  Six years later, DeMaio is proposing to go down the same corrupt road.

You’ll be relieved to know that regulations governing our present-day City Auditor have been tightened with some new safeguards.  But the City Auditor remains an appointed position, subject to manipulation, pressure, and retribution from the mayor and city council and even from the city’s audit committee, to which the City Auditor now reports.  (Perhaps the public will consider transforming the City Auditor into an elected position answerable, accountable, and available to San Diego voters.  But that’s a conversation for another day.)

To conclude: we don’t need no stinkin’ audits!  What we do need are thorough, honest, and untainted reports from a respectable City Auditor like Eduardo Luna.  And public willingness to demand them.

What we do need is a strong and honest new mayor who demands thoroughness and integrity at all levels of city government.  And a public-minded city council to demand the same.

What we do need is a ban on political hypocrisy, simple-minded solutions, lies, and the liars who are so good at telling them.  And informed voters to demand a different future for San Diego.