REPORT: "Regardless of the financial system issues, there was a lack of forthright communication"

To:         Greg Kisela, City Manager, City of Port Orange
From:     Richard M. Kelton

faultDear Mr. Kisela:

Attached above is my report regarding the Sunstate Meter and Supply contract change order agenda item.  The scope of my work was directed at determining who knew of the contract over expenditure which precipitated the agenda item and when did they know it.  In the course of my review it was clear that the City of Port Orange financial software system was not being fully utilized to track and control contract expenditures and inventory account expenditures.  Had system functionality been in place and utilized, the over expenditure would probably not have occurred in the first place.
Regardless of the financial system issues, there was a lack of forthright communication from the Purchasing Office to senior management once the over expenditure was identified.
I thank you for this opportunity to be of assistance to you and the City of Port Orange.  If I can be of further assistance in this or other matters please do not hesitate to contact me at any time.
Very truly yours,
Dick
Richard M. Kelton
386-951-4780
 



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12 thoughts on “REPORT: "Regardless of the financial system issues, there was a lack of forthright communication"

    • June 19, 2014 at 5:47 pm
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      Pretty much what I expected. Regardless of the ability to adequately and professionally control finances we only have a communication problem. And they only wanted to know who knew and when
      I see that the first two choices for scape goats don’t work here anymore. Lucky them. Then you have the purchasing manager that calls the utilities office assistant/budget analyst, oh by the way we over spent your account by $411,000, handle it. No reporting to his superiors. Then the office assistant is told to do the agenda item request. In the past upper management did the agenda item requests and if they needed help they would get the needed info from a division head or someone with expertise in the subject matter. Look how many people signed off on it The second request still lacked information that the CM blurted out when he was pressed about it at the council meeting.
      There were some inconsistencies in the report in one part it says Cenifro called Julia. In another it says Patti called Julia. In one part it says Yarbruogh knew on April 3rd and then on another part it says Yarbrough knew on the 14th or 15th. It says Kisela and Lewis knew on the 14th in one part and the 21st to the 23rd on another part.
      It is quite obvious that there are problems with financial controls and there is a lot of room for improvements. Has anyone done an assessment of the financial software to learn it’s functions before this problem? If not why? If you are using software to manage millions of dollars you should know how it works.

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  • June 19, 2014 at 8:33 pm
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    What I do not understand is that the assigned manager who had the responsibility of administering the capital budget, the capital project, and the funding mechanism was oblivious to expenditures relative to the continuity of this project. Vigilance, awareness, and due diligence would act as a monitor for expenditures whether work was being done or inventories supplied. It is clear that there were potential unutilized mechanisms in the financial software that could have red flagged this, however the buck has to stop somewhere and I am thinking at the bottom and top end of the management chain of the financial resources, and whoever is responsible for the communication mechanisms in the middle, which is obviously the city manager. In essence the city manager, the finance director, and the assistant utility director/acting field crew superintendent. We are talking about managers that are being paid in the six figure range by the taxpayers they supposed to be serving.
    My question is why did an overpaid FCCMA retread finance director who was an ex-fired city manager with no accounting credentials fail to have these software mechanisms in place? The other question I have is why did the assistant public utilities director/acting field crew superintendent with barely a high school education and with over 25 years of experience, heralded by Ken Parker as an expert in every aspect of public utilities discipline (LOL), and the primary project manager and budget administrator of the meter replacement program, a multi-million dollar initiative to recapture millions of dollars of lost utilities revenue for the citizens of Port Orange have no awareness of the budget, the purchase orders, the contract, and the requisitions of the project that he has more involvement and continuity with than anyone else? Finally, why does the FCCMA retread city manager, that was fired from his last job import and/or suffer these incompetents for so long? I am not an FCCMA Range Rider nor am I an accountant but I wonder why Mr. Kelton did not raise these two questions.

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  • June 19, 2014 at 8:52 pm
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    OK, exactly what does “a lack of forthright communication” mean? Sounds like Port Orange code for “some of our managers are lying”.

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  • June 19, 2014 at 10:35 pm
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    So Dick Kelton, the range riding ICMA hack who short listed Kisela into his present position believes there was a “lack of forthright communication from the Purchasing Office to senior management “ I’ll bet he does.
    This report was commissioned for the sole purpose of
    *) assigning all responsibility to mid level employees and below, And
    *) eliciting sympathy for Kisela, Saunders, Gurnee and Yarborough because bad junior employees did not tell them this or that.
    Kelton’s report not un-expectantly failed to consider even for a moment why Finance did not realize that all purchases after Dec 11th 2013 were made with un-authorizied funds …….. until it was supposedly discovered on April 3rd 2014
    Nor does it touch with a 10 foot pole why Kisela waited 2 weeks to inform his Finance director, Comptroller and even the City Attorney of this un-authorized spending and a further 2 weeks to inform Council …. Now that is a real lack of forthright communication.
    The only honest admission in Kelton’s report is that the City’s “ financial software system is not being fully utilized “
    AND IF he wanted to communicate forthrightly on that point he should have added that was because neither the Finance director nor the Comptroller possess the requisite ability to design, implement and monitor those controls that are required, And that the financial software system is capable of providing.
    BUT HE did not want to communicate forthrightly, instead he wanted to communicate some sympathy for his old life saver buddy who “knows nothing “ because the bad guy in purchasing did not tell him anything.
    The notion that Kisela and his Finance director and Comptroller should escape direct responsibility for their non-feasance in not having systems in place to detect un-authorized spending at the insistence it is requested because they have each reached their level of incompetence is an insult to the taxpayers of Port Orange.
    Ted Noftall

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  • June 19, 2014 at 11:05 pm
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    Amen Ted. I have long heard you cry of the lack of internal controls. It is ludicrous that some controls were in existence that could have prevented this but were simply not utilized. Maybe it will show up at the next audit. After all Finance wins an award on an annual basis for their stellar performance. Sounds like Finance needs some serious housecleaning. There are individuals still there that have remained after many fiascos under both managers. I wonder which skeleton closet keys they hold that has them still employed with the City today.

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    • June 20, 2014 at 11:26 am
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      Don’t count on the audit! This will not reach the level of “materiality” that the auditors are concerned with. At the best/worst a stern warning about using the software properly and firming up the process controls.
      It is going to rely on citizens to demand better accountability with our money. It is our money and our business the mayor likes to call us investors and in fact we are the owners. Has owners, investors and shareholders we should voice our concerns and demand performance. All it would take is a handful of new faces at the council meetings and a few new people sending e-mail and making phone calls to council members. Know who you are voting for on August 26th.
      Newton White

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  • June 19, 2014 at 11:30 pm
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    We were amused in the past by many episodes of the Range Rider. As entertaining as they may have been in the past we all know that they were all acting and fantasy and have become passé. Hopefully we have viewed our last episode of the Range Rider and have had our fill of this outdated show. Now lets move onto professional introspection and real managerial accountability. We have a 30 to 40 million dollar a year business that needs to be run by a professional CEO instead of an FCCMA retread.

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  • June 20, 2014 at 5:14 am
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    This report has as my smart spouse says “the gloss of legality” ..carefully crafted language…a report designed to protect and exonerate upper management….I agree Ted…..this report fails to draw the real conclusions that are required to fix the system…and the problems are top to bottom. …bad hires, bad training, no real close or general supervision… apparently FCCMA certified former city managers do not even understand our computer system and its limitations????.
    We have an entrenched city culture that really protects everyone mentioned here from any kind of real accountability…especially upper management… there might be one or two sacrificial lambs to take the fall….not even sure of that…the lambs may have knowledge that is actionable…am betting they do….if I were a potential lamb I would be thinking wrongful termination lawsuit… those lambs have knowledge of what was going on with management…you know they do….I sure as hell would not be going down without a fight if I were one of the targeted lesser lights…I’d be taking somebody with me..
    Sadly….the true fall is being taken by the taxpayer….we are paying incredible salaries, benefits and pensions for all these folks……..what most of us do not have anymore… and we are getting incompetence and deception in return……a terrible injustice especially after our recent history……hope PO taxpayers are paying attention. I hope council and our mayor are paying attention…..Parker V2..its coming…
    What’s that old Bette Davis line from All Above Eve???…..”fasten your seat belts…its gonna be a bumpy night”….
    Dianne Templeton Gardner

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  • June 20, 2014 at 6:39 am
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    Greg Kisela paid Dick Kelton $2,567.31 of Port Orange taxpayers money for writing a report that an eighth grader could have done especially since everyone already knew what the internal problems were. I resent this, having to live for two months on this amount of money as a retiree on Social Security. I guess in addition to halping each other out with ICMA lifesaver jobs they also manage to give little monetary “tips” along the way.

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    • June 20, 2014 at 8:45 am
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      Where is the e-mail Yarborough BELIEVES he received from Julia Wiggins on April 3rd?? Believes, recalls…..

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  • June 20, 2014 at 3:13 pm
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    Well Jason Yarborough resigned, another word for being shit canned by his buddy Kisela who hired him without an application or background check which would have uncovered his incompetence that Kisela probably knew only too well. Also the schmuck in Purchasing who probably was just not very good at his job and nobody noticed.
    Now Kisela can go before the council and say “Look, I took definitive action and fired these two misfits”. I certainly hope the Council doesn’t fall for this BS. What Kisela is doing is protecting himself by throwing lesser employees under the bus. I have no doublt if push came to shove the narcissus would thrown Lucy under the bus. It’s all about “self preservation” with him.

    Reply

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