Sunday, August 06, 2006
A Tactical Suggestion
It seems to me that if you want to open up the city's undemocratic planning process (more: here, here,here, here and here), you might want to begin by demanding that the city be transparent about its financial dealings. Yeah, I know, I'm staring to sound like one of those guys who won't shut up about something like the price of whale oil, but governments that aren't open and transparent about finances won't be open and democratic about decision making or planning. They just won't; it doesn't work that way.
Frankly, one reason that I haven't posted in almost a week is that I decided to scrap a couple of posts on the subject. Still, I can't help but wonder about part of an article that I actually complimented on Adrastos' blog last week:
I can't help but think that Donze got snookered by the "totally true, but largely irrelevant fact" ploy. It's true that accounting firms have been more cautious since the Enron scandal, but that was five years; Arthur Andersen was convicted of obstruction of justice four years ago. So why we are supposed to believe that the accounting firm suddenly got cautious now, a year after the Supreme Court overturned the Arthur Andersen conviction?
Nobody says that it did; it's largely irrelevant. Nobody doubts that a city audit has been complicated by post-Katrina circumstances, but there's certainly reason to wonder if those circumstances have been needlessly complicated. It's certainly fair to wonder when the administration started to worry about spending money on consultant's fees; is there any other area where the city has failed to bring in consultants to help it? As far as I can tell, nobody batted an eyelash when the fee for the mass transit consultants jumped from a $1M to at least $1.8M; now the city's balking at a million dollar maximum fee for an audit?
No matter what you think about the wisdom of paying consultants to advise the RTA, and other agencies, on how to adjust to adjust to the city's rebuilding plans before those plans have even been made, you have to wonder if all the outside consultants are being brought in partly for political reasons. Of course the city wants the best possible advice, but getting that advice also makes tough choices easier for elected leaders. When the time for tough choices comes, city leaders can say that they were just listening to the experts. Of course, the more money the city spends on expert advice, the more tough choices it will have to make. City leaders seem to be happy to spend money on consultants who will provide cover for spending decisions, but balk at consultants who might question spending decisions. At any rate, the cost of an audit shouldn't prevent the city from opening its books.
Frankly, one reason that I haven't posted in almost a week is that I decided to scrap a couple of posts on the subject. Still, I can't help but wonder about part of an article that I actually complimented on Adrastos' blog last week:
WHERE AUDITORS FEAR TO TREAD: In the wake of scandals a few years ago involving multibillion-dollar financial shenanigans at companies such as Adelphia, WorldCom and especially Enron, accounting firms are more careful these days about certifying the financial health of organizations they audit.
So it's no surprise New Orleans is having a hard time finding an outside auditor to check its battered and bruised books in the wake of Katrina.
The city has several audits done each year, including reviews of its various pension plans. For the past two years, the principal audit has been done by KPMG, for about $270,000 a year. But Mark Garrett of KPMG's local office told the City Council's Budget Committee this week that this year's audit promises to be so difficult and time-consuming that he is unwilling to set a flat fee. Instead, he wants to bill by the hour, with a $1 million maximum, and he said even that figure might not be enough.
I can't help but think that Donze got snookered by the "totally true, but largely irrelevant fact" ploy. It's true that accounting firms have been more cautious since the Enron scandal, but that was five years; Arthur Andersen was convicted of obstruction of justice four years ago. So why we are supposed to believe that the accounting firm suddenly got cautious now, a year after the Supreme Court overturned the Arthur Andersen conviction?
Nobody says that it did; it's largely irrelevant. Nobody doubts that a city audit has been complicated by post-Katrina circumstances, but there's certainly reason to wonder if those circumstances have been needlessly complicated. It's certainly fair to wonder when the administration started to worry about spending money on consultant's fees; is there any other area where the city has failed to bring in consultants to help it? As far as I can tell, nobody batted an eyelash when the fee for the mass transit consultants jumped from a $1M to at least $1.8M; now the city's balking at a million dollar maximum fee for an audit?
No matter what you think about the wisdom of paying consultants to advise the RTA, and other agencies, on how to adjust to adjust to the city's rebuilding plans before those plans have even been made, you have to wonder if all the outside consultants are being brought in partly for political reasons. Of course the city wants the best possible advice, but getting that advice also makes tough choices easier for elected leaders. When the time for tough choices comes, city leaders can say that they were just listening to the experts. Of course, the more money the city spends on expert advice, the more tough choices it will have to make. City leaders seem to be happy to spend money on consultants who will provide cover for spending decisions, but balk at consultants who might question spending decisions. At any rate, the cost of an audit shouldn't prevent the city from opening its books.
Comments:
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UNOP will publish all finaniclas monthly during the planning process. I should be posting those soon once planners are hired.
# posted by 
: 6:51 AM
: 6:51 AM
I am also curious about the CSO appointments. When will we find out who the "Neighborhood" representatives are?
# posted by : 3:41 PM
: 3:41 PM
That's definitely a good start, but I'm not very optimistic the planning process being democratic until all the city's finances are transparent, not just those of UNOP. It will probably helped if the T/P ran front page stories and editorials on outrageous contracts awarded by city officials while they were in office and before they were under state or federal investigation.
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