Saturday, March 15, 2008

Budget Account Deficits Still Pose Problems

Councilwomen Debbie Campbell and Terry Cohen were featured in Part 2 of WMDT’s news coverage of the city’s budget problems aired Thursday, March 13, at 6 and 11 p.m. To read the written version, click on this link: Salisbury City Budget Problems?

On behalf of the Tilghman administration, City Administrator John Pick maintained the following in the WMDT interview:

"We've got the ability to move money from one account to another with the approval of the mayor," Pick said.

Campbell and Cohen pointed out that the administration is not consistently doing what Pick said. Based on Cohen’s review of documents and a meeting with administrative staff, checks are being cut to vendors without the proper advance authorization to “move money” between accounts that Pick references. In at least one case, money was never moved between accounts within a department. Money was simply paid out from one account to cover the expenses of another.

Whether appropriations occur at a “line-item” level or a program “level” is still debatable. However, when money is not properly transferred and tracked between accounts, the likelihood increases that necessary items may have funding pulled.

“You wind up with an unrealistic picture of what financial resources you have to work with at any given point in time,” Cohen said. “That kind of poor financial management can result in priorities not being achieved, necessary maintenance not being done, and the purpose of appropriations not being served.”

Campbell referred back to the cautions issued by the audit communications released approximately six weeks ago.

“The audit said our internal financial controls are weak. We had an unusually large number of adjustments. Over $10 million was not properly accounted for. Our financial information is untimely, inaccurate and unreliable. The audit said there was more than a remote chance that errors or fraud could go undetected,” Campbell explained.

On the issue of the report Campbell and Cohen are seeking to have “dumped” directly from the financial system so that the council can be assured of seeing the numbers in their raw form, Council President Louise Smith reversed her former position of support of Campbell and Cohen’s request at this time after discussions with the administration.