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Palo Alto's city auditor resigns

Original post made on Aug 15, 2013

Palo Alto City Auditor James Pelletier will step down next month to join an international auditing organization, the city announced Thursday afternoon.

Read the full story here Web Link posted Thursday, August 15, 2013, 4:24 PM

Comments (23)

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Posted by Batter Up!
a resident of Another Palo Alto neighborhood
on Aug 15, 2013 at 7:46 pm

This is the third Auditor out of the last four that has resigned precipitously. Something is wrong here. What's really sad is that none of these Auditors have been willing to talk about why they have left so precipitously.

Thinking back ten years, or so, ago, the Auditor was essentially forced out of his job--and the Council effectively lied about it. It took almost eight months for the local media to dig deeply into his situation before the truth came out. Council member Liz Kniss was on the Council at that time, also.


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Posted by Not an issue
a resident of Community Center
on Aug 15, 2013 at 7:50 pm

What are you saying about Liz? Surely their cannot be anything self serving in her actions. Not Liz kniss. So she convinced the city to change the election cycle so that she would have an office to run for after being termed out of her other position, nothing self serving about that . So she did not tell everyone about her major health issues before the election last year. Nothing slf serving about that


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Posted by Batter Up!
a resident of Another Palo Alto neighborhood
on Aug 15, 2013 at 7:57 pm


The following is a little of the Bill Vinson saga--an Auditor that seemed to do a fairly good job, but ruffled too many feathers of people who preferred the status quo--


Unanswered questions demand investigation of timecard fraud:
Web Link

CITY GOVERNMENT: When an audit drops in City Hall, does anyone listen?:
Web Link



Publication Date: Wednesday May 6, 1998

CITY GOVERNMENT: When an audit drops in City Hall, does anyone listen?

From travel expenses to planning, Palo Alto's operations seem lacking
by Elisabeth Traugott
since the first of the year, Palo Alto residents have been informed by City Hall staffers and outside consultants that the robust city budget doesn't guarantee a smoothly operating bureaucracy. They've discovered the planning department is poorly managed, the library system suffers from shoddy resource allocation, the travel reimbursement process lacks accountability and some as-yet unnamed emergency services personnel like to offer special treatment to high-ranking officials.

The results of the various audits and reports beg the question: Just what is going on at City Hall?

"I think each one is an individual situation," said Mayor Dick Rosenbaum. The planning department, for example, was inundated with council business just as it was organizing itself to tackle (Stanford's) Sand Hill Road projects, Rosenbaum explained.

"Clearly, they had too much to do and that was a function of council requests. And I've always felt that (the interim) historic preservation (ordinance) was always the straw that broke the camel's back," he said.

But city auditor's records show that noncompliance may actually be a trend rather than an exception to the rule.

Last week's travel expense audit--which indicated that 90 percent of travel expense reports are flawed in some respect--is the most recent in a series of audits within the past 18 months that have found inefficiencies in City Hall.

For example, a February 1997 audit of how the city makes changes to existing contracts indicated that 49 percent of the changes sampled "were not properly justified and/or lacked proper approval."

In one case, a staff secretary approved a $52,099 change order for a landscaping maintenance contract and an increase of $51,000 for the golf course master plan contract.

Two months later, in April 1997, City Auditor Bill Vinson released a scathing report on the city's building inspection practices. He found that, in a sample of 50 inspections performed between January 1995 and March 1996, 84 percent "were finalized without evidence of approval on all required inspections."

Vinson cited the example of a commercial building that received final approval with 11 outstanding inspections, including electrical inspections of rough wiring and fixtures.
---

Vinsion resigned under a very dark cloud. The council claimed that he went of his own accord; but later, one of the local media was able to determine that he had been paid a substantial sum of money to "go away".


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Posted by mattie
a resident of Crescent Park
on Aug 15, 2013 at 8:58 pm

I'm not sure if it's fair to say others left precipitously. Sharon Erikson was in the position for years and left to return to San Jose in their head role. Linda Brouchaud (sp?) left for personal, largely parental reasons, if I'm not mistaken.

More importantly, city council should seek a strong, independent voice. In general, municipal auditors aren't worth their pay unless they're fearless enough to make big waves, yet reasonable enough to understand, listen, and advise... in due balance.


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Posted by Batter Up!
a resident of Another Palo Alto neighborhood
on Aug 15, 2013 at 9:32 pm

> I'm not sure if it's fair to say others left precipitously.

It's not only fair--it's absolutely true. The previous Auditor took maternity leave, came back for a short while, and then left with little notice, or reason.

Oh, and Erickson also was complaining about the lack of seriousness that the City was showing her recommendations before she left.

Three out of four seems like a pattern to me.


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Posted by Retired Staffer
a resident of another community
on Aug 15, 2013 at 9:57 pm

Sharon Erickson was appointed City Auditor in San Jose instead of the chief deputy. The chief deputy (name escapes me) came here to be CPA Auditor. CPA hired SJ's reject. In the meantime one of Ms. Erickson's deputies is now the City Auditor of Honolulu. Ed Young just won a major professional award in that capacity. Why weren't they kept aboard in Palo Alto? Because the Council members and wannabes didn't have the courage to stand up to unreasonable criticism.


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Posted by Laura
a resident of Atherton
on Aug 16, 2013 at 11:32 am

Liz Kniss is obviously in bed with developers. I wish someone would investigate she and her husbands business dealings. I would guess that there is corruption.


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Posted by curmudgeon
a resident of Downtown North
on Aug 16, 2013 at 12:32 pm

"I wish someone would investigate she and her husbands business dealings."

You might find this interesting: Web Link


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Posted by Something is rotten in the city of Palo Alto
a resident of Barron Park
on Aug 16, 2013 at 12:41 pm

Liz Kniss has had many, many conflicts of interest and has no business being in Palo Alto city government in any capacity. She has had financial interests in many of these development projects that she has voted in favor of. A serious investigation of her and her husband is definitely in order, the sooner the better. She does not vote in the interest for the city or the citizens, but in the interest of making herself wealthier.

Something is seriously wrong that we go through auditors so fast. The silence is probably due to contracts they have been forced to sign upon leaving.


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Posted by the_punnisher
a resident of Mountain View
on Aug 16, 2013 at 2:34 pm

Now is the time to " count the silverware " that the city owns. This many new auditors in such a short time is a danger flag. How do I know this? My ex is a CPA who did audits, primarily for tax liability issues. PA probably has several dark secrets that make qualified people leave when they find out information ( or lack thereof ) that could leave them " holding the bag " that could ruin their professional standing.

This situation reminds me of and old, not so funny auditor joke that may apply here:

A businessman ( this used to be about Clinton, but I changed the subject ) known for his penchant for shady deals was havinga hard time choosing a CPA to keep his business legal.All the people who applied did not live up to his specifications.

He found the perfect person he wanted. How did that happen?

When he asked the question " What does 2 + 2 equal? The CPA got up, checked the door to see if it was locked, closed the blinds and then sat down and said: " Whatever you want it to be "...( remember, Clinton quibbled about the meaning of the word IS ).

That situation may be why you have a " revolving door policy " when it comes to honest CPAs when doing a City Audit.

P.S. My ex was so good at being a CPA, the IRS wanted to hire her straight out of college as soon as she had her degree & CPA certificate.

That could have changed the course of history if she had accepted the job. Jackson, Obama and a host of Chicago politicians would have been guests of the Federal Crossbar Hotel for some time...












0


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Posted by Retired Staffer
a resident of another community
on Aug 16, 2013 at 4:48 pm

I think CPA's problem is that the elected officials drank the "waste, fraud and abuse" Kool-Aide that they read in the local press. Example: Santa Clara's water rates. Ninety percent of Santa Clara's water is well water delivered to the aquifer by the Valley Water District. Only ten percent comes from Hetch Hetchy. But Santa Clara appears on the Hetch Hetchy customer list, so some think that the CPA Utility Department is somehow making an illegal transfer of funds in order to cover something up because well water is so much cheaper than imported water. These elected officials expect the Auditors to find gobs and gobs of money hidden here and there. Well, it's not there! These Auditors can't find ghost money! So they quit under pressure. My hunches only.


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Posted by Trainspotting
a resident of Charleston Gardens
on Aug 16, 2013 at 10:52 pm

Ahhh - i know. the reason why the previous auditors resigned must be because Palo Alto's pay compensation package is not competitive compared to other cities (being cynical). Hence, we are now resolving it by forcing all city staff to accept a raise in the next few years.


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Posted by Rush Limbaugh
a resident of Stanford
on Aug 17, 2013 at 8:25 am

[Post removed.]


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Posted by Not an issue
a resident of Community Center
on Aug 17, 2013 at 12:23 pm

Punisher-- what does your post have to with the the topic at hand, or could not resist an opportunity to bash Clinton and Obama?


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Posted by Batter Up!
a resident of Another Palo Alto neighborhood
on Aug 18, 2013 at 10:58 am

> These elected officials expect the Auditors to find gobs and
> gobs of money hidden here and there. Well, it's not there!
> These Auditors can't find ghost money! So they quit under pressure

Retired staffers often have unique insights in the operations of local government that elude the rest of us. But staffers also are too often blinded by the limited scope of government operations. Certainly the work plans for the PA Auditor have included various financial audits of revenue streams received by the City. For instance, periodically, the CPA Auditor will review the sales tax revenue, or the revenue from the collection agency that handles CPA police issued citations. And usually, the CPA Auditor finds small discrepancies—but not a lot of real money.

What people tend to forget is that the City's expenditures are heavily tied up in labor/benefits. About 85% of the City's payouts are in categories that directly deal with labor costs. So—to find any real money, an Auditor would have to spend time reviewing the operational aspects of the City's labor force, to locate areas where cost-controls are needed, and trying to determine alternatives to the current operational methods used by the operating departments that would lead to lower labor costs—and ultimately, some "real money".

One example of an interesting Audit performed by Sharon Erickson shortly after her appointment involved measuring the typical time it took a contract to work its way through City Hall. If memory serves, she determined that it took about 184 days—or about six months. She provided some transit times for other organizations, which seem to be somewhat shorter in time. Ms. Erickson did not repeat this Audit later in her tenure—but this should be on every Auditor's list of "must-do" Audits, at least every two years. Yet, this very key piece of information about the effectiveness of City operations is not reveal to the public on a periodic basis.

Most of the key operating departments have not had full, operational, audits. Ever! One can only speculate why not. If one considers the possibility of pushback from the departments, the City Manager, and no mandate from the City Council—it's not that hard to believe that any Auditor worth his/her salt simply gives up, and moves on.

Ms. Erickson, by the way, has been doing some exceedingly interesting work as the San Jose Auditor. It's hard to see much of interest for her time here in PA, outside her establishing the yearly Services and Accomplishments Report.


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Posted by Retired Staffer
a resident of another community
on Aug 18, 2013 at 1:00 pm

@Batter Up! Thank you for an informative and articulate post. Most of the lead time a contract takes up is preparation by engineering analysis, specification analysis and time-required advertising delays for bid solicitation--not by sloth. And if 85% of the police budget is not taken up by personnel costs, what should the 85% be expended on? Thanks again.


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Posted by Batter Up!
a resident of Another Palo Alto neighborhood
on Aug 18, 2013 at 4:47 pm

> Most of the lead time a contract takes up is preparation by
> engineering analysis, specification analysis and
> time-required advertising delays for bid solicitation--not by sloth.

The report by former Auditor Erickson did not identify any delays in the contract preparation time that included the word "sloth"; neither should it be introduced in any observation of City practices in this discussion.

Without having access to Erickson's report, it's difficult to remember the time subdivisions that were identified by her. It's assumed that a contract's preparation time would only involved time intervals once a prospective contractor had been identified, and some sort of MOU (Memo of Understanding) or equivalent, issued by the City to indicate its good faith to do business with the contractor.

If memory serves, Erickson suggested that perhaps too much time was spent in "legal", but there probably wasn't any detailed analysis of one/more contracts to make that point.

One would like to believe that the Administrative Services Department head would recognize that moving paperwork through the organization would be important. Coming up with a tracking mechanism for paperwork is not a very intellectually complicated proposition, so it's disappointing that Erickson, or the subsequent Auditors, or even the Administrative Services Deparment manager (or City Manager or City Council) did not direct that this tracking system be put in place.

The Auditor could then perhaps spend some time reviewing the transit times, comparing them with timings he/she might acquire from other organizations.

Unfortunately, we don't seem to have people in the key roles in our City government who think that this sort of Information Management tool would be worth the effort to create, and operate.


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Posted by Batter Up!
a resident of Another Palo Alto neighborhood
on Aug 18, 2013 at 5:12 pm

> And if 85% of the police budget is not taken up by personnel
> costs, what should the 85% be expended on?

This is an incredibly hard question to answer in this venue. It opens the door to all of the fundamental questions that are plaguing American cities today--what is the purpose of the local Government? How much should be spent on local government? Should Local Government be a provider of neeeded/necessary services, or an employer of last resort for elements of the society that might be otherwise unemployable? Who should be accountable for dealing with failures in Local Government?

It would not be difficult to fill up several pages with these sorts of questions. Linking back to the Auditor, he/she has a clear role in helping to frame these sorts of discussions, by providing accurate, and detailed information about government operations.



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Posted by Retired Staffer
a resident of another community
on Aug 18, 2013 at 9:59 pm

No argument with "Batter UP" on either post except to note that government delivers services, which is a labor-intensive activity and the labor involved is pretty well educated and the competition for a well-educated, professional labor force in this community is intense. Please remember that non-exempt public employees receive no performance bonuses, and no public employee receives equity participation (ESOP, etc.). The only compensation we earn is pay, vacation, partial retirement, and medical. No social security. No short-term disability unless we pay for it. I once suggested that all items of correspondence be marked with a time-date stamp as received, but I was turned down.


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Posted by Batter Up!
a resident of Another Palo Alto neighborhood
on Aug 19, 2013 at 8:40 am

> except to note that government delivers services,
> which is a labor-intensive activity

Who says that "services" are necessarily "labor intensive"? If the management agenda of an organization is to hire as many people as possible, then that organization will be considered as "labor intensive". Look in the private sector, and notice that many of the "services" that one may purchase therein are effectively no different than those obtained from the public sector. The private sector (at least successful organizations) is continually reviewing its effectiveness, as revealed from its profitability--discovering ways to reduce costs. With no profit motive, or competition, the public sector just seems to do what it did yesterday—with little evidence of ever reducing costs, or even understanding the need to reduce costs.

> Please remember that non-exempt
> public employees receive no performance bonuses,
> and no public employee receives equity participation (ESOP, etc.).

And why should they? They create no wealth; they are not obligated to do anything that actually benefits society (the taxpayers) and are generally immune from being terminated for non-performance/poor-performance.

> The only compensation we earn is pay,
> vacation, partial retirement, and medical.
> No social security.
> No short-term disability unless we pay for it.

This is quite a menu of complaints. Ever think about contacting the UN to charge your employer with human rights violations?

The City of Palo Alto currently is spending about 50% of each employee's salary in "benefits"—which includes a hefty pension. Depending on a number of variables, such as the exit salary and the number of years lived, post retirement, the average government California employee will drag down more than twice what he/she was paid during his/her working years. It's difficult to understand what is "partial" about this retirement package. Expecting to be paid Social Security on top of the already lucrative salary seems rather greedy.

A decent Auditor could produce reports investigating comparative compensation packages between local government, and the private sector. The Palo Alto HR Department no doubt purchases this sort of data from private suppliers, but it's rare that these reports are ever introduced into the public domain as a result of these purchases.

> I once suggested that all items of correspondence be marked
> with a time-date stamp as received, but I was turned down.

A sensible suggestion. Although perhaps a little difficult to achieve unless all correspondence were handled (meaning opened) at a central location. As more communications become electronic, time-stamping becomes less of an issue.


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Posted by Retired Staffer
a resident of another community
on Aug 19, 2013 at 11:09 am

[Post removed.]


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Posted by Norm Carroll
a resident of Midtown
on Aug 19, 2013 at 3:00 pm

Just soooooooooooo cool....I Got a questioneer from him last week, and he may never se it...............


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Posted by Norm
a resident of Midtown
on Aug 19, 2013 at 3:01 pm

Spelling goof, ah well.


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