Today our local skewspaper, the Coeur d’Alene Press, editorially suggested that the City of Coeur d’Alene should get a forensic audit done in order to restore the public’s confidence in the City’s ability to handle its finances.
Now Coeur d’Alene Press Publisher Jim Thompson and Editor Mike Patrick want the City to pay more money to hire a forensic accountant to come in and develop evidence that can be used in court against a person who has already agreed to plead guilty.
The horse named “Forensic Audit” has already left the barn insofar as the case against Sheryl Carroll is concerned.
Forensic audits are accounting processes used by specially-trained accountants to find and preserve evidence that will be admissible in court. What the Press editorial board ought to have recommended instead is a financial risk analysis to identify all the financial risks facing the City and to suggest appropriate preventive and corrective countermeasures. The fact is, a competent City Finance Director would already have done exactly that — shortly after being hired.
The American Institute of CPAs (AICPA) website has a fairly good overview titled Fraud Prevention. Although this applies particularly to private corporations, the principles can be used to guide municipalities as well — at least those municipalities that are genuinely interested in retaining or restoring the public’s confidence.
But things have badly deteriorated in Coeur d’Alene, Idaho. The first step to restoring the public’s confidence in the City’s ability to be good stewards of the public treasury is to replace Mayor Sandi Bloem, Council President Mike Kennedy, Councilman Deanna Goodlander, Councilman Woody McEvers, City Administrator Wendy Gabriel, City Finance Director Troy Tymesen, and City Attorney Mike Gridley.
Then the new Mayor, City Council, City Administrator, and Finance Director need to adopt and follow rigorous practices for soliciting and awarding public works and professional services contracts. The primary objective of these contracts must be to secure the best value for the City’s money. Thus, even if the dollar amounts of the contract would justify sole-sourcing it, the City must consider seeking competitive quotes and bids. The City should also make it very clear to those being solicited that engaging in any of the practices amounting to bid-rigging will result in disqualification from consideration. Likewise, any City employee or official tolerating or engaging in bid-rigging should be fired and prosecuted. In other words, a new City administration should make it very clear to all, certainly including the public, that the business-as-usual practices for awarding public works and professional services contracts in Coeur d’Alene have ended.
Likewise, the City government must make it crystal clear that it will not participate in questionable although legal practices such as using foundations to launder money and circumvent the will of the people providing the money. Nor will the City publicly or privately support organizations which engage in that practice.
Today’s Press editorial is several years late and at least $365,000 short. A costly forensic audit at this point would not be prophylactic. A competent, well-conceived risk analysis would, but only if commissioned by City officials who are genuinely interested in protecting the public from incompetence and corruption.
Now that the horse has left the barn, Coeur d’Alene needs to shovel out the stalls before bringing in new horses.