Mayor Amy Harrington recently raised questions about staff’s failure to provide city financial reports monthly to the City Council, as required by Sonoma’s Municipal Code. She also objected to her signature being applied by rubber stamp to city checks without her having a detailed check register showing payee, reason for payment and amount. Both of her concerns are valid.
The City Council, jointly and each member individually, has a fiduciary responsibility to insure that the public’s funds are being properly spent and accounted for. Once a possible impropriety arises, the council has the absolute duty to act upon it; failure to do so carries a risk of personal liability for each individual member of the City Council.
The safeguarding of the public’s money is perhaps the greatest obligation of elected officials. Nothing government does can be accomplished without funding, and protecting funds is council job number one.
The failure of Sonoma’s City Council to exercise financial oversight has happened before, with disastrous consequences. In 1994, a new auditor hired by the City discovered twenty-one reportable conditions, including the city’s being out of compliance with covenants on bonds it had issued; that’s fraud. Record-keeping had been so poor — literally in pencil in a 20-column ledger book — that the auditor had to make $41-million in adjustments just to get the books back in balance. Money had been improperly moved between various separate city funds. And to make matters worse, the city’s General Fund was out of cash and had to secure a bank loan to make payroll. It took nearly six years of austerity, hiring freezes, and development of new revenues to dig itself out of the financial hole, proving that proper financial management and oversight is essential to the health of government, and ultimately the citizens.
Those lessons, sadly, have been forgotten. Staff and City Council turnover has resulted in a loss of institutional memory and a false sense of security. There seems to be a failure to understand that if city finances get out of control government can go bankrupt. It’s happened in other places and in 1994 it almost happened here. It’s not necessarily a matter of honesty or dishonesty, though in the past a city employee was caught selling surplus city property for personal gain, which ultimately sent him to jail; it’s a matter of doing things right.
People make mistakes all the time, and that’s normal. If safeguards and systems are not in place to catch mistakes, however, that’s not normal. It’s not normal that standard financial reports are not produced monthly, and it’s not normal for checks to be signed without proper oversight or review by the Mayor. These are the types of accounting procedures every well-run business and organization uses to insure that their money is safe.
Such standard accounting procedures should have been in place long ago. The city’s finance department has been understaffed and without sufficient professional oversight for much too long. If the city’s accounting software is out-of-date, that’s no excuse.
We fully support Mayor Harrington in her effort to insure that the city’s finances are reported regularly and that financial transactions are fully transparent; it’s what the public expects and the law demands.
— Sun Editorial Board