Under the city charter, the city auditor has independent authority to carry out examination of finances, documents and operations of any city department, other than the office of any elected official (too bad about that exception). A well run and honest city auditor’s department, as we have in San Jose, is the citizens’ best guard against corruption and financial malfeasance as well as overspending and misspending of public money by civil servants. To be effective, the auditor must remain separate from political control and be able to “strike at will,” something that is recognized in the mandate of the city charter.
The city’s retirement department administers two pension plans with a whopping $5 billion value. There are 26 members of the department and two seven-member boards that provide oversight. Two years ago, an auditor’s review uncovered questionable travel expenses that included $400 spent by one staffer on a limo to get from an airport to a hotel (you can fly to Europe for less than $400). Now, Interim City Auditor Steven Hendrickson wants to carry out a new audit of the retirement department’s travel expenses, but the trustees of the funds, including Vice Mayor Cortese, have been trying to stop him. Why?
There is no doubt that Hendrickson has the power to conduct such an audit. $5 billion is a lot of money. This fact and the previously discovered problems at the department are more than enough to warrant another examination. The department spends more than $24 million on administrative expenses annually, including nearly $100,000 on travel, so it’s a very small portion of the budget. However, it is also an area where the discovery of some hanky panky might lead to finding out about other problems, so it makes perfect sense to have a look.
Now that the trustees have tried to stop him, it is even more important that Hendrickson be allowed to independently carry out a thorough audit of the travel expenses and perhaps check a few other categories too, unimpeded by the council and trustees in any way. Why would anyone object if they had nothing to hide? Something stinks here and the best interest of San Jose’s citizens will be served by the auditor doing his job and making a public report as soon as possible.
JACK,
Very good subject today. We as taxpayers, certainly deserve to know if there was/is any abuse of our money. I totally agree with your question “why would anyone object if they had nothing to hide?” All of the council should press for this new audit. I plan to phone my member and tell him my desire to have the audit done.
Jack, I was hoping to see your analysis of the mayor’s and Nguyen’s proposal to have a citywide vote on naming a small shopping area Little Saigon. Even the Mercury News called it the purest expression of democracy to have a citywide vote.
I recall that you objected to democracy in a small school district on the ground that a coin toss was an acceptable way to fill a board vacancy. You even had a Two Minutes of Hate toward those of us who wanted just a little democracy.
What do you say about the citywide vote now proposed? It seems to me that this is a larger and more costly version of pure democracy, and we wait for your analysis (after you have talked with both sides, of course) with impatience.
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I think you are correct in your analysis of the city auditor’s role. However, I disagree with your statement that “Why would anyone object if they had nothing to hide?” That’s right out of every tyrant’s playbook for the last couple thousand years. I have no idea of why objections would be made to a particular way of auditing or to a particular person, but kindly don’t jump to conclusions. Your argument is the principal argument for wiretapping by the government on all phones and electronic devices…after all, ” “Why would anyone object if they had nothing to hide?”
And your case would have been stronger had you interviewed at least one person on one of the boards before going to print.
This audit process is very important and Mr. Van Zandt should be applauded for bringing up a good solution.
Whatever is done, can we avoid giving it to Armando Gomez. From what I read in the Mercury News, the zippy headed Gomez has apparently got involved Brown Act scandal.
Oh, well, poor Armando, he truly is Chuck’s example of how the Peter Principle can work at City Hall. Armando should have not missed the Brown Act training they did in Milpitas. Unfortunately, he spent a lot of time in the anteroom gorging down the Togo sandwiches.
Sometimes we have to pay a price for Democracy. In the Little Saigon issue, at this time the Council cannot be trusted to conduct a fair vote on the issue. For one, we have the Vice-Mayor, who is campaigning for the County Supervisor position shaking the hands of the Little Saigon protesters as they pass the Grandstand during the New Years Parade a couple of weeks ago and then stating that he had been deceived by Madison Nguyen. Does anyone have any idea how our honorable Vice-Mayor is going to vote. Talk about cheap politics. The residents of district seven have a right to vote on this issue since the Council seems have have already been corrupted by the protesters. They ask for Democracy but now it seems they don’t want it to go to the ballot. It seems that to them Democracy is a one way deal.
#2. The wiretapping analogy is not a valid one in this case. I believe that anyone who handles other people’s money should expect to be regularly audited just as a matter of course. That includes banks, publicly owned corporations and government entities. Privately held businesses and individuals are free to spend their own money as recklessly as they want.
Isn’t a bit unfair to rip on Vice Mayor for political campaigning at every opportunity like all other candidates –
So atre you saying that he should not shake hands of any of people involved in any political disputes – very small group left over
He is expected to talk to all voters not just a few to see what voters want – American democracy in action
Jack told us:“Two years ago, an auditor’s review uncovered questionable travel expenses that included $400 spent by one staffer on a limo to get from an airport to a hotel (you can fly to Europe for less than $400). ”
Can someone tell me just how many “irregularities” were found in that audit? If we’re talking about a few hundred bucks out of a $100k travel budget, it isn’t worth the time and effort. If we are talking significant bucks, then let’s re-audit.
I wanted to comment on the retirement department audit, specifically the “limo” expenditure. I am currently the Vice Chair of the San Jose Police and Fire Retirement Board. It is not surprising that the Mercury News continues to portray these issues as negatively as possible. Be that as it may, the audit that discussed the limo ride was not an audit of the Retirement Department. It was an audit of the City of San Jose’s purchasing cards. The audit brought several issues forward, one of which was the $400 expenditure incurred by a member of retirement staff for a limo.
All of us would agree that $400 is a steep price to pay for transportation. However, in this case, the service was authorized in that a female staff member was arriving late in the evening in New Jersey. By herself. I am sure that we would all agree that safety should be of prime importance in cases like this. In any event, the limo ride was called into question and answered as I have explained above.
From this purchasing card audit, a recommendation was made that the travel policy of the Retirement Department be conducted. We did that. We had our independent auditor audit our travel policy and expenditures last year. The results of that audit didn’t question our expenses, rather, our methods of requesting travel and reporting back to the Retirement Board were too informal. We have adopted appropriate administrative policies to answer those concerns.
Jack asks why the Board is trying to stop the audit and indicates that the City has the authority to audit whatever and whenever they so choose. No one is trying to stop anything. We already conducted the audit, and reported back to the City Council last July-the auditor was present at our Board meeting when we added our travel policy to our annua audit.
Ken #8: Was the female staff member on official business, such that payment for her limo ride would be appropriate, or was she on other business/personal trip/business other than the budget to which she billed it?
And $400.00?? I just took a limo to SJC, and it was $90.00 from my home on the Cambrian side of Willow Glen. If her trip was 25+ miles, $400.00 seems reasonable.
But we still get back to who pays. If it’s official business of the agency/account to which she billed it, no problem. But if her trip had nothing to do with the budget to which she billed it, then her safety is on her dime, isn’t it?
Johnmichael
She was there on department business. Personal business would not be reimbursed.
Jack.
Did you recieve my last responce to Pierluigi? Please reply.
Ken #10—perhaps personal business SHOULD NOT be reimbursed, but mistakes happen.
But another question looms—even if she were on department business, why a limo @ $400.00 vs. a cab, at perhaps $50.00?
Jack, all said, was it necessary to pick on Dave Cortese ? Dave has served our city well.
Johnmichael-I don’t think anybody disagrees that $400 (even though that was for a round trip as I found out today) is excessive. As I tried to indicate in an earlier post, she was arrving late in New Jersey and it was recommended to us that we arrange for a car service for her-recommended by our travel agents-that even the taxi service can be suspect. But, yes, we have made changes to our policies and did take this seriously.