|By James Halpin, The Citizens' Voice, Wilkes-Barre, Pa.|
|McClatchy-Tribune Information Services|
But numbers released at a council meeting last week blew that out of the water -- a months-long audit revealed the county had in fact run a
The drastic disparity prompted Councilwoman
Council Vice Chairman
"I firmly believe that there's some serious cooking going on there," Brominski said. "They're moving funds around from different places to different places, and we don't know about it. There's no transparency whatsoever."
"I can understand the concern with the number changing by so much," Swetz said. "That's just due to the fact that the county did not have the accounting staff. The county has hired some people and we've actually posted for two more positions. With more accounting staff, things can get done quicker in a better manner."
The audit, conducted by accountants for
The reason for the tax shortfall, according to the report, is that the county sold off some of its delinquent tax revenue and brought in
County expenses were also
Overall, the county had a deficit of
As a result of the high debt,
He added that
"It was a transition time of a commissioner budget handed over to a brand new government, and us trying to find our way," Morelli said. "Basically to summarize, a good portion of that budget was bogus."
"The projections were based on a decade's worth of financial malfeasance," Bobeck said. "This is what you have when you switch forms and you're left with the old bones of a financial government that had no checks and balances, that had no accountability, that had no processes or procedures in place."
Lack of oversight
Former county Controller
Griffith said county Manager
The home-rule charter gives the county manager authority to transfer money within "any division, department, bureau, office, agency, board, commission, other administrative unit, or budgetary function subject to his/her control."
The only requirement is that the manager must notify council and the county controller within five days after the transfer.
But Griffith said there are some significant problems with that system. For one thing, council should be notified immediately, he said.
Also, the account numbers used by the county's financial software system provided by
As a result, council members don't always know what money is being transferred where, he said. And being able to transfer money between line-items can conceal the source of overspending because the account won't reflect a negative balance, he said.
"Consequently the council's blind on the budget," Griffith said. "They're approving a budget with the understanding that he's only allowed to spend a certain amount of money. Well, all he has to do is transfer money in there and he is never overspending that line item, so council never really knows."
He said council needs to ensure that the administration is following the intended spending plan, and there should be a system of checks and balances to make sure positions aren't staying open with the money being used elsewhere, for instance.
"It's strictly poor management on budget and finance, and it's strictly poor oversight on council," Griffith said. "There's a lot of things going on that make it very difficult to track what's going on in the administration over there, but I think the lack of oversight by council is huge. And the lack of oversight by council is because the manager is not telling them."
Lawton did not immediately return cellphone messages seeking comment Friday.
'Less time on chickens'
County administrators have made no secret that they transfer money to cover costs. Early this year, the county was in a cash-flow crunch.
Property tax bills were delayed this year because council reopened the budget and debated whether to return to a system of elected tax collectors. In the end, they voted to return to using the tax collectors at a reduced rate and to strip funding from the
But the resulting late tax bills meant that tax revenue was slow to start flowing. Swetz has previously said the county was looking to shift finances around internally to keep up with utility payments, insurance and payroll until revenue started coming in.
Morelli said the notion of council being unaware of money transfers could be correct, but that is part of the reason he initiated a system of committees earlier this year -- to ensure the committee members are keeping tabs on budget issues their corresponding divisions are facing.
The administration does notify council members when it makes a funding transfer, but it's a question of them "understanding it or asking the right questions," he said.
"Yes, I agree that in the past, council wasn't aware because of the way we were structured," Morelli said. "Now we have a setup but just because we have a setup, it still comes down to council members asking the appropriate questions and focusing on the real issues."
He noted many meetings in recent weeks have focused on sending letters to state lawmakers or whether to permit residents to keep chickens in their yards.
"Less time on chickens and more time on focusing on the budget," Morelli said.
Swetz said that although the account numbers have changed in the new financial system, the account names are the same so council should be able to recognize them.
The issue of council potentially being unaware of line-item transfers is moot -- members couldn't do anything about the transfers even if they knew about them because the manager has that authority, Bobeck said.
"In the end, this is about how much you have coming in and how much you have going out, regardless of account numbers," Bobeck said.
The budget issues are not going away because nobody is addressing the root cause of the problem -- the county has been "kicking the can down the road" by borrowing money and selling delinquent tax revenue for quick cash, he said.
The solution, he said, could be relying on the private sector to do tasks that are not "inherently governmental." The tasks should be put out to bid, and whoever can do them faster, cheaper and better should win, he said.
That will reduce taxes and "get control of the budget," he said.
"The more you raise taxes, the more you drive people out of the area," Giamber said. "The more you drive people out of the area, the less your revenue. It's a death spiral."
Morelli, meanwhile, said he "highly doubt(s)" that the extent of the 2012 deficit will repeat itself in the 2013 budget audit, which is slated to begin next month.
Leaders now have a good understanding of what the county's true expenses and revenue are, and Morelli is confident the government is getting on the right track, despite nay-sayers lamenting things don't seem any better now than under the old form of government.
"When you have to make tough decisions financially, obviously it's not going to get better," Morelli said. "We're not borrowing money anymore to pay for jobs and the things that aren't needed. We're now living in our means."
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