Many years ago, former Councilman/Assemblyman Robert Ranieri said at a Council Meeting…."In the land of the blind, the one-eyed man is King."
The Hoboken Finance Department has a responsibility to record every dollar that comes into and leaves the city's coffers. But something went seriously wrong when a Council member asked why anticipated cash revenues from the Hoboken Parking Utility "parking meters" decreased by over ONE MILLION DOLLARS.
As a point of reference, on November 14, 2005 the Hoboken City Council passed Resolution No. 05-179 approving a $300,000 one year contract with Donohue, Gironda & Doria - a Bayonne firm that specializes in municipal accounting - to privatize the city's Finance Department. The City recently entered into the third one-year contract with the accounting company that has been working alongside the city's chief financial officer to manage the city's books.
MISSING FUNDS?
Many years ago, former Councilman/Assemblyman Robert Ranieri said at a Council Meeting…."In the land of the blind, the one-eyed man is King."
The Hoboken Finance Department has a responsibility to record every dollar that comes into and leaves the city's coffers. But something went seriously wrong when a Council member asked why anticipated cash revenues from the Hoboken Parking Utility "parking meters" decreased by over ONE MILLION DOLLARS.
As a point of reference, on November 14, 2005 the Hoboken City Council passed Resolution No. 05-179 approving a $300,000 one year contract with Donohue, Gironda & Doria - a Bayonne firm that specializes in municipal accounting - to privatize the city's Finance Department. The City recently entered into the third one-year contract with the accounting company that has been working alongside the city's chief financial officer to manage the city's books.
MISSING FUNDS?
Hoboken City Council FY2008 Budget Hearing, December 6, 2007: Third Ward Councilman Michael Russo, who also serves as Chairman of the City's Finance Committee, asked Business Administrator Richard England if there was an explanation for the one million dollar decline in parking meter cash revenues.
City Council Meeting, December 19, 2007: Hoboken Parking Utility Director John Correa addressed the City Council. Director Correa stated that, upon hearing of Councilman Russo's inquiry, he initiated an internal departmental audit that showed a difference of $34.61 and was awaiting confirmation from an outside accounting firm. Councilman Russo then announced to the Council that he made a calculation error and was mistaken about the cash shortfall.
City Council Meeting, February 6, 2008: The Council made reference to the recently received FY2007 budget audit that arrived seven months after the end of the budget year. In the report, the auditor commented on potential problems associated with the handling of cash within the Hoboken Parking Authority. In response to the audit report, 5th Ward Councilman Peter Cunningham called for a FORENSIC ACCOUNTANT and commented "For God sake, clearly, this audit indicates that we have got money going out the back door and something needs to be done about it."
Hoboken Parking Utility Director John Correa again addressed the Council and reported that he found that parking meter revenues were lower than had been anticipated during the past two years. As a result, he claimed to have initiated changes in enforcement and parking meter maintenance for the month of January 2008, which corrected the problem.Correa said, "In the past 30 days, we [the Hoboken Parking Utility] have given out over 3500 summons and the meter revenues now exceed those of '05 and above."
WHO IS THE BLAME?
While it would be easy to place the blame on the Parking Utility, the responsibility for fiscal checks and balances rest squarely on the shoulders of the Chief Financial Officer and the department he oversees, the Hoboken Finance Department.
Neither the Chief Financial Officer nor the outside accounting firm of Donahue, Gironda, and Doria (the $300,000/year contractor with staff working within the Hoboken FINANCE DEPARTMENT) noticed and/or questioned the downward trend of the "anticipated" parking meter cash revenue.
And what was Councilman Russo thinking when he "sounded the alarm" about reduced parking meter revenue at the Council Budget Hearing only to back off thereafter, totally reverse himself, and downplay the issue as a mistake in his calculations at the following council meeting? What was that all about?
Why did it take a "seven month late" FY2007 (July 1, 2006 – June 30, 2007) audit to alert the City Council that there were serious accounting problems? And no one has even mentioned the lost "anticipated" parking meter cash revenue for the period from July 1, 2007 to December, 2007. Go figure.
Additionally, three years ago, Council members Terry LaBruno and Chris Campos questioned the wisdom of bringing in the $300,000/year outside accounting firm and voted against it. However, the majority of the Council was swayed by the firm's promise of readily available financial data, its competence to make decisions, and ability to detect and correct problems throughout the budget year. The icing to the proverbial cake, it seems, was the firm's diligence to provide an accurate snapshot of the City's financial health.An invaluable management tool, but IT DID NOT WORK. As recent circumstances have proven, the Council's starry-eyed impulse was, in no way, the right decision. Too bad guys, you don't even get points for trying.
To date, the City has paid over $900,000 in contract fees to the accounting firm of Donahue, Gironda, and Doria. However, unless the Council gets satisfactory answers to their sudden abundance of questions, the accounting contract should be cancelled and the responsibility for managing the City's financial records given back to the CFO.
RESIDENTS PAY:
But fear not, taxpayers! Hoboken has already initiated damage control to replace the lost "anticipated" meter revenues. Passed just last week, City Council resolutions now have Hoboken residents paying more money for parking permit fees and in daily and monthly parking garage rates. On top of this, residents also run the risk of paying more money for parking ticket fines as a result of stepped-up parking summons enforcement. Even so, it gets better! HOBOKEN RESIDENTS also get to pay money for a fulltime CFO, who shares a City Hall Office with contracted $300,000/year accountants as they manage the City's books. Isn't it great to live in a city in which residents literally PAY for the government's mistakes?
Video # 2
A 15 minute video consisting of the four council meetings discussing the missing ONE MILLION DOLLARS in anticipated cash parking meter revenue.