Without efficient internal controls, Culver City could be hemorrhaging large amounts of money, and no taxpayer/voter would know it.
On April 8, 2019, the City Council will consider the innocuous sounding topic of “(1) Creation of a City Council Ad Hoc Subcommittee to Work with City Staff to Review the Moss Adams, LLP Internal Audit Reports and Review Staff’s Recommendations for Improvements to the City’s Internal Controls; and (2) Appointment of Two City Council Members Thereto.”
What’s the real story?
In 2015, Culver City’s Independent Auditor warned the then City Council of deficiencies in the Culver City’s internal controls. In 2015, Culver City hired Moss Adams LLP to advise how to clear up the mess. In 2016, Moss Adams LLP undertook a similar mission for the City of Santa Monica. That mission and implementation of recommendations were completed in one year. The Moss Adams LLP report for Culver City is not expected until October 2019.
For the last three years, Culver City’s current Independent Auditor has annually provided the City Council with a scathing report that criticizes Culver City’s lack of efficient internal financial controls. “We noted internal control deficiencies across various accounting transaction cycles, which included, but were not limited to, journal entries, budget control, revenues and cash receipts, accounts payable and expenditures, payroll and human resources, and risk management systems. The City must establish an effective system of internal controls….” The 6/30/17 report states, “John Nachabr (sic), City Manager will be responsible for the planned corrective actions and the expected implementation date is June 30, 2018.” The 6/30/18 report states, “Onyx Jones, Chief Financial Officer will be responsible for the planned corrective actions and the expected implementation date is June 30, 2020.”
Those deficiencies did not specifically mention the six years of abuse occurring with Culver-City-issued-employee-credit cards. www.LGEsquire.com/190303_LetterToCityCouncil.pdf
Will the Subcommittee have teeth? The Subcommittee should be authorized to: (1) investigate why Culver City, after paying outrageous staff salaries, did not have efficient internal controls by 2015; (2) investigate why, after paying Moss Adams LLP over $100,000, Culver City does not yet have an Enterprise Risk Assessment Report; (3) investigate why Culver City does not enforce some existing internal controls; (4) determine whose heads should roll for this apparent staff incompetence.
Les Greenberg, Esquire