Sloppy Bookkeeping, Significant Financial Abuse in Philadelphia, Key City in Battleground State of Pennsylvania?

Rebecca Rhynhart

With  Pennsylvania shaping up as a key battleground state in 2018 and 2020, as well, financial disarray and the significant potential for fraud and abuse in one of it’s major cities could give Republicans something to target in the Fall.

Philadelphia’s government has the worst accounting practices among the nation’s 10 largest cities, with $924 million in bookkeeping errors alone last year, according to an audit released Tuesday by City Controller Rebecca Rhynhart.

That’s on top of the now-infamous missing $33 million, the discrepancy between what the city’s records say it has and what is in the bank — the result of a failure to reconcile the city’s cash account over several years, Rhynhart said at a news conference.

In total, the controller’s auditors found two “material weaknesses” and eight “significant deficiencies” in the fiscal 2017 books. The accounting terms refer to serious issues with the city’s internal financial controls.

“This is a major problem and needs to be treated that way by the mayor and the finance director on down,” Rhynhart told the Inquirer and Daily News. “If the City of Philadelphia is talking about tax increases, let’s get our house in order.”

By comparison, New York, Los Angeles, Chicago, and Houston did not have any problems in their 2017 audits. Phoenix had one deficiency and San Jose, Calif., had one material weakness and five significant deficiencies.

The details become increasingly damning the closer one looks.

“There is no concrete action plan. There’s no plan to give any confidence that this won’t be happening again next year,” Rhynhart said, referring to the $924 million in accounting errors.

Rhynhart said the finance department had a history of sloppy record-keeping, noting her predecessor found similarly high number of errors in the books.

“What’s been happening is they are depending on auditors from the controller’s office to fix all these errors,” Rhynhart said. “Finance’s response has been and continues to be, ‘Well, we will learn from that.’… The issue is that they should be preparing an accurate financial statement without the auditor doing it for them.”

As for real answers, let alone a solution, Rhynhart made it clear where the responsibility rests in the largely democrat controlled city, “It’s up to the mayor to say ‘This is very urgent.’ I haven’t heard that yet,” she said.





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