RE: Not so fast Mr. Kisela
RE: Not so fast Mr. Kisela April 22, 2014 9:53 AM
From: “Ted Noftall” <Ted@TedNoftall.com>
To: “Greg Kisela” <firstname.lastname@example.org> “Robin Fenwick” <email@example.com>
Thank you Manager Kisela,
You have made clear that you are operating under the same misconception as the former manager and finance director …… namely internal control is something the Auditor comments on and, and to which you dutifully respond back that you have resolved, as in …. “21 of the 24 findings and comments identified in FY 2012 were resolved”
The problem with operating under that misconception is that the Auditor’s review of the City’s internal control is for a very limited purpose and use — as he makes clear on P 180 of the CAFR.
“In planning and performing our audit, we considered the City’s internal control over compliance with the requirements that could have a direct and material effect on a major state project to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with Chapter 10.550, Rules of the Auditor General, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of internal control over compliance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of Chapter 10.550, Rules of the Florida Auditor General. Accordingly, this report is not suitable for any other purpose” (09-30-2013 CAFR P 180)
The practical effect of operating under your misconception is that every half dozen years or so taxpayers get hosed with major asset misappropriations due to improperly designed, implemented or monitored controls as typified by the water debacle in the fall of 2012 which was in full swing when you came on board.
Since you find considering “internal controls” in these terms to be “ baffling” let me help as best I can.
“The design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.“ ( Independent Auditors’ Report – CAFR P 21 ) IS MEANT TO BE AN ONGOING PRO-ACTIVE OPERATION.
That means the City NEEDS TO TAKE A PAGE from the private sector where misappropriated assets belong to shareholders with a vested interest sufficiently high to be insistent on meaningful responsibility and accountability to hopefully prevent, but if not punish such misappropriations AND START DESIGNING, IMPLEMENTING, and MONITORING NEW AND ENHANCED INTERNAL CONTROLS ON AN ONGOING BASIS.
ACCORDINGLY I would again ask;
Does the City sub out the design, implementation, and maintenance of internal control, OR does it perform that task in house, OR is that task not performed at all ??
AND IF the City performs that task in house who actually performs that design, implementation, and maintenance ?
AND WHAT qualifications and experience does that individual or individuals possess to adequately discharge the important task of designing, implementing and monitoring controls adequate to safeguarding taxpayer assets .…. because if any of your Finance staff including your Finance Director or Comptroller is a degreed accountant, or holds a CPA designation , or has any recent professional accounting or auditing experience those facts are well concealed on their resumes. ??
I will address your threat or promise, real or implied to “remove administrative officials” critical of what can only be characterized as your ‘good enough for government work standards’ in a subsequent e-mail.
From: Kisela, Greg [mailto:firstname.lastname@example.org]
Sent: Monday, April 21, 2014 4:42 PM
To: Ted Noftall
Cc: City Council; Roberts, Margaret; Fenwick, Robin
Subject: Response to your e-mail
This is in response to your e-mail to me last week. First, don’t forget to copy the City Clerk with your e-mail that you copied to some of City Council members at their personal e-mail addresses; the e-mail related to City business. I know it may take a little time for you to get used to the new process. I note and appreciated your attendance at the April 7, 2014 Sunshine Law training as well as providing comments to the recently adopted Electronic Information System Ordinance which is designed to assist the City in capturing and retaining all public records.
Secondly, I stand by my comments made to you at the last Audit and Budget Board meeting. Your “blogging” of the former Finance employee by name was the contributing factor in her decision to leave City employment. This is unfortunate as she was a dedicated and committed employee who truly was an asset to the City. In my opinion, your desire as the Chair of the Audit and Budget Board to review the resumes and applications of all individuals in the Finance Department to see if they should have been hired and/or retained, oversteps your’ s and the Board’s authority. Specifically, the City Charter empowers the city manager to “Appoint, and when he deems it necessary for the good of the city, suspend or remove all city employees and appointive administrative officials”. I feel your past actions have undermined employee morale and if you do not refrain from your past actions you will continue to create an undesirable environment for our employees.
While I do agree with your goal of improving the City’s financial record keeping and reporting I do not appreciate your attacks on the City’s Finance Director, Wayne Saunders. Mr. Saunders inherited many challenges last year and has over the past year attempted to correct these issues. I have been blessed with working with many fine individuals in my private and public sector careers and Mr. Saunders stacks up with the very best. The City has made substantial progress in improving the financial operations of the City and I am proud of Mr. Saunders’ and his team’s individual and collective efforts.
Your comment about the FY 2012 management letter and internal controls “baffles” me. The spreadsheet that the Finance Department prepared and shared for review and comment with the Mayor and City Council as well as the Audit and Budget Board in September/October of 2013 was a summary of every finding and comment that the external as well as the forensic auditors provided the City. This spreadsheet contained all of the findings and comments that were provided to the Mayor and City Council in June of 2013. It also contained City management’s plan to address each of those issues. I am pleased to report that 21 of the 24 findings and comments identified in FY 2012 were resolved to the satisfaction of the City external auditors in this year’s audit.
I can assure you that if for some reason you didn’t get a copy of the FY 2012 management letter it wasn’t deliberate. If the Audit and Budget Board feels these issues weren’t resolved correctly they can recommend to the City Council to hire an additional auditor to review them.
Mr. Saunders along with the external auditors told you last week that the CAFR and management letter were separate documents so hopefully that clarifies that issue for you.
By copy of this letter I am asking the City Attorney to brief you on the legal issues relating to this matter.
From: Ted Noftall [mailto:Ted@TedNoftall.com]
To: ‘Kisela, Greg’
Cc: Bob Ford (email@example.com); Dennis Kennedy (firstname.lastname@example.org); email@example.com; Drew Bastian (firstname.lastname@example.org)
Subject: Not so fast Mr. Kisela
The following comments are in follow-up to our conversation at the A&B Advisory board meeting on April 14th
Your suggestion that my posts on blogs and elsewhere caused the finance employee who was hired to perform the monthly reconciliations of the City’s bank accounts to resign is pathetic.
If that individual required minimal assistance to do her job she should have received it, AND the monthly bank reconciliations should have been completed on a timely basis without exception or excuse. so as to safeguard taxpayer interests at all times.
If that individual required more than minimal assistance to complete those reconciliations, (a) she should never have been hired to a position for which she was un-qualified, and (b) she should have been dismissed when her lack of qualification became obvious.
EITHER WAY the failure was yours as was your decision to hide the fact that timely bank reconciliations were not completed for most of last year, AND THEN you compounded that deception by having your finance director mislead the A&B board regarding their bank reconciliation inquiries.
While I understand you do not want anyone reviewing the qualifications and experience of those you employ let me tell you why that is important and remind you that the A&B Advisory board was established with the bedrock purpose of creating a: professionally inquisitive and guardedly skeptical volunteer citizen oversight board, possessing specialized educational and practical experience in matters of audit and finance to be on guard as yet another failsafe, to alert Council and the People they are elected to represent, as to any potential concerns regarding the independence and performance of future Auditors, Managers and Finance Directors alike.
Now let me tell you why this review is relevant. The independent Auditors opinion reads in part;
- “ The City’s management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.“ ( Independent Auditors’ Report – CAFR P 21 )
At the last A&B meeting that Auditor confirmed that while the City does not prepare its own financial statement but rather subs out that task ….. he is not of the understanding that the City subs out the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements, nor does his firm assist with those matters as that would impact his independence.
So let me ask you directly – Does the City sub out the design, implementation, and maintenance of internal control, OR does it perform that task in house, OR is that task not performed at all ??
If the City performs that task in house who actually performs that design, implementation, and maintenance ??, AND what qualifications and experience does that individual or individuals possess to adequately discharge the important task of designing, implementing and monitoring controls adequate to safeguarding taxpayer assets .…. because if any of your Finance staff including your Finance Director or Comptroller is a degreed accountant, or holds a CPA designation , or has any recent professional accounting or auditing experience those facts are well concealed on their resumes.
Manager Kisela you should be further aware of a serious problem with the veracity and competency of what your Finance director is saying and doing . Mr. Saunders told me not less than 6 or 8 months ago that while historically City staff never reviewed the monthly reconciliation of the CITY bank account administered by Kemper Sports they were doing so as at the time of that conversation, YET at Monday’s A&B meeting he advised that last month was only the 1st or 2nd month those reviews had taken place. Big difference.
When pressed he further advised that he personally performed last month’s bank reconciliation review. That is most curious because as you may remember at the last Golf board meeting I inquired as to an explanation regarding the $7,664 negative number in an account labeled Cash-Housebank & Other. Not only did Mr. Saunders not offer an explanation at that golf meeting he was not able to offer an explanation last evening, some 3 weeks later although he did mumble something to the effect that he just looked at that months reconciliation.
So what exactly does Mr. Saunders ‘ bank reconciliation review’ consist of, and is it an adequate review ??
Finally Manager Kisela the current level deception regarding the your Finance department’s performance is not in the best interest of the taxpaying public.
The public never received a copy of the Auditor’s management letter for the 2012 Audit , AND only received a copy from the 2013 management letter inadvertently. Council approved that letter as part of the 2013 Audit package at their March 25th 2013 meeting and while it was posted on the City web site initially it was subsequently removed LIKELY BECAUSE it not only contained a most disparaging remark regarding the readiness of your Finance staff, BUT BECAUSE IT HAS CALLED into direct question the veracity of what Mr. Saunders advised the A&B board at their Jan 13th meeting regarding delays in the start of the Audit.
Is there a problem with Mr. Saunders veracity, OR is the problem that he is just not well informed as to what is going on in his department ??.
4 thoughts on “RE: Not so fast Mr. Kisela”
I find it quite ironic to see the city manager accusing someone of undermining city employee morale. As a former employee and someone that keeps in touch with my former colleagues throughout the city I have to say this is pathetically ridiculous.
The manager and management in general undermined the hell out of my morale and the employees that I talk to feel the same way. The usual comments are this place has gone to hell and this used to be a good place to work now it sucks.
I know of several employees that have recently left their jobs or are planning to leave in the near future have left and are leaving due to management. They are fed up with the BS. It has become an embarrassment to tell people in public that you work for Port Orange. Partly due to our recently departed management and partly due to current management because they feel like nothing has changed for the better. It’s the same old crap perhaps even worse.
Don’t blame a citizen that is active in the community. Ultimately the city manager is responsible for anything and everything in city operations good or bad.
I understand that you may have transmitted this document to another party or parties that are not included in your original distribution. If so, please provide within seventy-two (72) hours of being sent, pursuant to the City’s newly adopted Electronic Information Systems ordinance, these public records to the following e-mail address email@example.com. Thank you for your cooperation on this matter.
Thank you Manager Kisela,
Which “public records” are you referring to ??
It is interesting that the city manager of Port Orange is taking special interest that according to rules and regulations the emails sent out by a member of a city board should also be sent to the appropriate city entity. This is good practice for him and if he gets good at it, perhaps he will be able to develop a system where city hall operational details are sent in a timely manner to the city council, the various boards and the public.
Ted Noftall usually has no problems informing everyone of those items he thinks are important, but the city of Port Orange does not have such a history. Need I enumerate?
— hank springer