Attorney Vanessa Haberbush explains what makes for a good city auditor, identifies warning signs of mismanagement in city government, and points out some potential pitfalls of endlessly reelecting the same person
Do you know what an auditor is? Did you know that most, if not all, cities have one and that it is an elected position? In Long Beach, California, for example, there is a city auditor that is elected by the people. Why is this important?
If you are not in the financial world, you may not even realize what an audit is or why an auditor is important. An audit is an official inspection of an individual's or organization's accounts. Normally, this is a review of the financial records of a company to make sure that the financial books and records match what actually transpired. An auditor is someone who conducts this review. Audits are done by CPAs and it is a very specialized type of review to look for things like embezzlement, improper spending, improperly classifying expenses, or similar types of “creative accounting.”
Because an audit is, at its core, to insure the company’s finances are legitimate, it is particularly important that an auditor is neutral and outside of the company being audited. Enter, the city auditor.
The city auditor, at least in Long Beach, must be a CPA. Without that specialized knowledge, the auditor cannot do the job. However, the auditor also cannot do the job if he or she is too closely connected with whatever is being audited. This becomes more and more of an issue the longer the auditor is in office. The auditor can get lazy and get the same accounting firms to run the audits without ensuring they are accurate. The auditor can pick and choose which things will be audited and which will not be. The more entrenched the auditor becomes with various parts of the city, the more difficult it may be to keep the audits neutral and what they are designed to be.
So, next time you are voting for city auditor, think about what this job entails. Look to see if the city’s projects are losing money. Is embezzlement occurring? While an auditor may not be able to stop these types of things, the auditor can and should shed light on them. Has that happened? A good auditor probably will have quite a few enemies in the city if he or she does the job correctly. Consider how long the current city auditor has been in his or her position. That alone may warrant a change. Do not just blindly vote for your city auditor. It may be the one position with more power but less prestige than any other that truly warrants a good choice.