9 Audit Findings Public Questions

[Lady Budgetdown]

Dearest reader...

This one sat on the edge of the ledger for a bit.

A reader sent me a breadcrumb involving a Michigan government entity, public money, contracts, internal controls, and a performance audit conducted by the City of Detroit Auditor General.

Normally, the spectacles go on and down the rabbit hole I go.

This time, I hesitated.

There is a political connection involving someone associated with the public entity, and Lady Budgetdown has been rather firm about keeping campaign politics out of the ledger.

But then I realized something:

If I would examine these exact same records when no election was involved, it would hardly be consistent to ignore them simply because politics happens to exist somewhere nearby.

So the political piece stays out of this entirely.

No endorsement. No opposition. No election analysis. Just the government entity, the auditor's findings, the authority's response, and the receipts.

Now... let us open the ledger.

In 2022, the City of Detroit Auditor General released a performance audit of the Public Lighting Authority of Detroit.

The audit contained nine findings.

Not nine Facebook accusations.

Not nine anonymous allegations.

Nine findings issued by the City's own Auditor General.

Among them were concerns involving internal financial controls, accounting procedures, procurement practices, segregation of financial duties, contract oversight, payments beyond contract terms or limits, and bonus payments.

Finding #8 carried a particularly interesting title:

"PLA Made Improper Payment Of Bonuses To Employees And Contractors."

According to the audit, approximately $230,000 in bonuses were paid between 2016 and 2020.

That included approximately $168,000 to employees, $35,000 to the executive director, and $27,000 to contractors.

And here is where the spectacles need to stay firmly in place.

The executive director's contract allowed an annual performance bonus of up to $10,000.

Auditors found that the executive director received $12,000 in 2018 and $13,000 in 2019.

Across those two years, that was $5,000 above the contractual maximum.

That does not mean the Auditor General found that someone secretly sat down and simply "paid himself." That is not what the report says.

PLA explained that bonus practices existed before the current executive director and provided additional context regarding how bonuses had been handled.

Context matters. But so does the finding.

And PLA agreed with Finding #8 and said changes would be made to its bonus practices.

The bonuses were not the only issue.

Auditors also found a lack of proper oversight of PLA contracts, including instances involving contracts that had expired or payments exceeding contractual amounts.

The audit also found inadequate segregation of financial duties and weaknesses in internal controls over financial processes and transactions.

And, importantly, the Auditor General did not say fraud occurred.

The finding was that the structure increased the risk of errors or misuse because important financial duties were not sufficiently separated.

That distinction matters.

Receipt.

Context.

No embellishment required.

So Lady Budgetdown's question is actually rather simple:

When a government auditor documents improper payments, weaknesses in financial controls, contract-management problems, and other deficiencies involving public money... what should taxpayers reasonably expect to happen next?

Should corrective actions be documented publicly?

Should the governing board demonstrate that the controls were changed?

Should taxpayers be able to see which findings were corrected, which were disputed, and which remain unresolved?

Because the findings existed. The authority responded. Corrective actions were promised.

What weight those findings deserve is not something I need to decide for anyone. That is precisely why the receipts are here.

And one final reminder:

Yes, there is a political connection involving someone associated with this public entity.

I am deliberately leaving it out.

Had these exact records involved people with no political connection whatsoever, I would still believe they were worthy of examination.

So the standard remains the same:

Public entity. Public money. Public records. Public questions.

The reader may decide the rest.

With receipts and respect,
Lady Budgetdown

Sometimes neutrality does not mean refusing to open the ledger.

Sometimes it means making certain the same ledger gets opened no matter whose name happens to be inside.

Sources:

City of Detroit Office of Auditor General — Performance Audit of the Public Lighting Authority, May 2022
https://detroitmi.gov/.../performance-audit-public...

Public Lighting Authority — Annual Reports and audited financial information
https://www.publiclightingauthority.org/annual-reports-2/

Public Lighting Authority — Funding, budgets and independent audited statements
https://www.publiclightingauthority.org/finances-2-2/

#LadyBudgetdown #WithReceiptsAndRespect #PublicMoney #GovernmentAccountability #FinancialTransparency #FollowTheReceipts #PublicRecords #TheLedger