When Charles Bryson was promoted to director of Public Safety in September 2007, he told The St. Louis American the largest number of people he had ever managed was about a dozen and that he had never before had hiring or firing authority.
In his new position, he directs the largest department of city government, with more than 1,500 employees.
A stinging audit of his department released last Thursday by State Auditor Susan Montee calls into doubt Bryson’s ability to handle this task, so much larger than any he had been assigned previously.
Throughout the department, Montee’s audit staff found inadequate or non-existent oversight and safeguards. “Potential loss of city revenue” is noted repeatedly, as auditors found invoices that were not checked, monies that could not be accounted for, revenues that were not reconciled with receipts.
Bryson also was found in violation of federal tax laws in not reporting the personal miles driven on his City vehicle, paid for by taxpayers, as “reportable compensation.”
In no instance did Bryson quibble with the auditors’ findings. Over and over, he agrees and says the problem will addressed – often by software he proposes to utilize or staff he says he plans to hire.
Though ample negligence and lapses were recorded under Bryson’s leadership, which he did not dispute, the fault is not his alone. His predecessor, Sam Simon, ran the department for the first few months of the audited period, and some of the problems date back even before 2001, when Simon was appointed following the election of Mayor Francis G. Slay.
Keystone commissary
Though not dealing with the largest sums of money in the department, perhaps the audit’s most shocking findings concern the Correction Division, managed by Eugene Stubblefield.
The Corrections Division maintains a bank account to hold personal monies for inmates and contracts with a vendor to provide commissary services. Leftover monies are not returned when an inmate is released after normal business hours.
“If monies are not disbursed when the inmate is released, the inmate is required to contact the Corrections Division to request the monies,” the audit notes.
“They make the inmates jump through hoops to get the money that is rightly theirs,” Montee said when delivering the report last Thursday at the Wainwright Building downtown.
But this has not been happening, and the division has not been keeping track.
“At March 31, 2009, inmate accounts for 11,493 inmates on the liabilities list totaled $143,174. However, the city jails can only house 2,153 inmates,” the audit notes. That makes for more than 9,000 phantom inmates whose money was left with the City. Of that $143,174 in abandoned money, only $59,921 actually was classified as “Abandoned Funds.”
The division was more than $100,000 off in reckoning the amount of active money in the commissary bank account. “The March 31, 2009, bank balance was $714,235 and the book balance was $615,708,” the audit notes. When the auditors began field work, there was no record of bank reconciliations since July 2005.
Just as the division was holding onto money that belongs to former inmates, at least one former inmate was taking advantage of the absent oversight. From January 1, 2007 to March 31, 2008, more than $18,000 in unauthorized electronic withdrawals were discovered.
Sloppy books
Stubblefield’s Corrections Division also has problems keeping track of money paid to contractors.
“For 5 of 34 expenditures reviewed,” the audit notes, “the amount paid exceeded the itemized contract amount. As a result, the Corrections Division overpaid two vendors a total of approximately $5,600.” That margin of error is troubling when, in the year audited, the division paid nearly $1 million to contractors “for commissary and inmate necessity items.”
Sloppy accounting practices are also rife in the Building Division, which transmitted approximately $8.8 million to the City Treasurer in the year ended June 30, 2008.
The division, which is managed by Frank Oswald, receives monies for items such as permits, licenses and appeals, but these are often recorded on unnumbered receipt slips without duplicate copies, making oversight all but impossible.
“So you can’t go back and trace what should have been there to see if something is actually missing,” Montee said when delivering the report.
Also, before the auditors started their field work, the Building Division did not perform any follow up on outstanding electrical permit fees. The March 29, 2009, outstanding electrical permit fees list totaled over $81,000, with fees owed for electrical permits dating back to 2005.
The auditors note, “Failure to maintain an accurate receivables list and pursue unpaid fees on a timely basis may result in lost revenue to the city” – an admonition repeated throughout this audit and indeed throughout most of the audits of the City.
“A lot of the findings are somewhat repetitive,” Montee admitted.
During the year audited, demolition costs billed totaled approximately $1.7 million. However, the report notes, “the Building Division does not ensure demolition costs are correctly billed to various property owners. As a result, 2 of 15 property owners tested were under billed by $2,200.”
And the report notes that the “Director’s Office does not adequately monitor the burglar alarm contract,” which pays the vendor $100,000 a year plus 32.5 percent of fees collected for false alarm violations. “During the year ended June 30, 2008, the city and the burglar alarm contractor received $710,811 and $442,243, respectively, for burglar alarm receipts,” the audit notes.
However, though the City has the right to inspect the vendor’s books, “the Department of Public Safety has not conducted a review of the contractor’s accounting records” nor requested the Comptroller’s Office to do so.
Potential lost revenue is met in many instances by a business environment with contractors that is less than completely competitive.
In the year audited, the Building Division paid approximately $3.4 million for demolitions but did not maintain adequate documentation of efforts to compare prices. Also, when contractors went over bid, the audit notes, “the changes are not always clearly documented and approved. As a result, the total paid does not agree with some contracts.”
“Inadequate documentation is something we have seen routinely throughout the City,” Montee said, when delivering the report.
Asked if the lack of oversight and proper documentation made city government a breeding ground for fraud, Montee said, “There are a lot of risks in that area, because we are dealing with a lot of money.”
