Niagara Falls -- When I first learned about the outburst of temper City Controller Maria Brown demonstrated at last night's council meeting - and her failure to turn over to reporter Tony Farina the latest audit of city finances - I thought it was because she didn't like the way some of the stories in our publication turned out - as if the press' right to access public information is contingent on how they write about her.
Later it struck me that maybe Brown was being defensive.
She simply didn’t want the veteran investigative journalist Farina dissecting an audit which reflects poorly on her job performance.
Considering this audit was prepared by Dyster's Buffalo consultants, the Bonadio Group, and that it was paid for by the taxpayers - but at Dyster's direction - and therefore less likely to be as hard on the mayor as an independent audit might be, I decided to re-review the last independent audit of the city's finances -- made in 2013 by the NYS Comptroller’s office, titled: The City of Niagara Falls Financial Management and Information Technology Report of Examination January 1, 2009 – January 9, 2013.
While the Bonadio audit gives bleak news - and paints a picture of a city in financial shambles - despite, as the Bonadio audit noted, the city taking in $188.2 million in casino funds, the NYS comptroller's audit went much further - and reveals more than the waste of millions in casino cash.
Residents who are sincerely interested in learning how their city received a windfall of $182 million and yet is on the verge of bankruptcy, we recommend they make an attempt to study the comptroller's audit for themselves.
It is available online at www.osc.state.ny.us/localgov/audits/cities/2013/niagarafalls.pdf)
As a summary, the NYS Comptroller's audit (page 7) established three areas of interest and inquiry:
1. Do the Mayor and Council ensure that budgets are realistic and structurally balanced?
2. Does the Controller properly record financial activity?
3. Are City officials adequately safeguarding IT (information technology) assets?
The answers are found on:
• Page 9 under Financial Condition:
“We found that the City has had a pattern of structural budget deficits, meaning recurring revenue were not sufficient to fund recurring expenditures….
• Page 10 under Financial Condition
“The City has funded these structural deficits by relying on “one-shots” such as fund balance (draining savings) and surplus moneys remaining in the capital projects fund.… "
"(T)he City also has not prepared a multi-year financial plan since the 2010 fiscal year… it is especially important for a city with financial difficulties to prepare such multiyear plans to develop a plan for elimination accumulated deficits.”
• Page 12 under Recording Financial Activity
“The Controller (Maria Brown) has accounted for a substantial amount ($7.1 million) of unassigned fund balance in the capital projects fund. ….. The Controller also stated that she was aware that these moneys should be returned to the general fund as unassigned, but was reluctant to do so, expecting that City officials would use these moneys in their entirely to reduce the tax levy or increase appropriations… "
Translation: The NYS Comptroller said that City Controller Maria Brown admitted she refused to return money left over from projects that were over-budgeted or came in lower than expected - but kept millions in the wrong accounts - apparently without informing the mayor or the council.
Brown knew it was wrong but, as she admitted, but she did this to keep millions away from the elected mayor and the elected city council out of fear that these elected officials would spend the money, or seeing the surplus, reduce taxes for the people.
While her intentions may have been good, this tucking of money into savings accounts without the consent of the council or the mayor gave her unwarranted control at city hall.
As anyone familiar with city hall knows, when the mayor or the council come hat in hand to Brown to ask if there is money for a certain project, she will often say "Let me see if I can find the money."
Sometimes she does and sometimes she doesn't.
Of course a city should not have an unelected controller having to find money.
But there is worse to follow: After learning that millions were kept outside the general fund by Brown, the state comptroller ordered her to return the money to general fund, however, some of the money was missing or unaccounted for:
The State Comptroller stated: "(A)dditional funds may remain in other projects which should also be returned to the general fund. As of the end of our fieldwork, City officials were unable to demonstrate, and we were unable to definitively establish, the total amount of these other moneys. However, based on our review of the records, we conservatively estimate that the amount could range from $1 million to $1.4 million.”
Translation: The NYS comptroller had to hunt down money that had been misdirected away from the general fund, and, yet, after spending considerable field time, the staff wrapped up the audit with the statement that they could not find all the money. "(B)ased on our review of the records, we conservatively estimate that the amount could range from $1 million to $1.4 million.”
Meantime, the Dyster administration has trotted out a new audit by their outside consultant, Bonadio, which skirts around the serious issues raised by the NYS comptroller and tries to explain the city's financial woes without making the simple connection that had Dyster not wasted the better part of $182.2 million in casino cash and had Brown operated as an unelected controller is required to do, this city would not be facing the financial jeopardy they now face.
It is time for Dyster and Brown to answer the serious issues raised by the state comptroller's audit and not use the Bonidio audit as the uncontested and definitive analysis of the city's financial situation.
(Next week we will delve into the secret part of the State Comptroller's audit - that has never been shared before with the public.)