Ducking scrutiny

Baltimore's City Council this week voted down a proposed charter amendment that would have required that each city agency be audited every two years. And no wonder; such a proposal may be unprecedented in Maryland. A review of the charters of Anne Arundel, Baltimore, Harford, Howard, Prince George's and Montgomery counties reveals that they have no such requirement.

No, in those jurisdictions, the charters require that audits be conducted every year.

During the debate on the amendment, Mayor Stephanie Rawlings-Blakeformally requested that the city comptroller's office, of which the city auditor is a part, investigate some agencies, including the Department of Recreation and Parks, whose books have not been audited for decades. But she opposed the proposal, which was sponsored by Councilman Carl Stokes, and her influence was apparent in the council's 8-7 vote against the measure. Her allies on the council, including one who had been a co-sponsor of the measure, voted as a bloc to reject it.

The city finance department issued a letter that raised concerns about the cost of conducting audits, though it was not able to estimate how much that would be. The letter also cautioned: "Another consideration is the capacity of individual agencies, boards and commisisons to prepare for fiscal audits. One of the preliminary items required for an audit is financial statements. Most city agencies, boards and commissions do not prepare annual financial statements and lack the expertise to prepare these documents." In other words, the finances of city agencies are such a mess that we shouldn't bother examining them.

That might be amusing if there weren't so many examples of city agencies making costly mistakes. Within the last year, The Sun's Scott Calvert and Jamie Smith Hopkins (neither of whom is an accountant) have managed to uncover errors in the administration of homestead property tax credits, historical preservation credits and the assessment of unsold waterfront condos that have cost the city tens of millions of dollars. And in February, city Auditor Robert L. McCarty issued a report on water bill irregularities that resulted in $4.2 million in refunds to 38,000 customers. Since then, The Sun has reported on a variety of other errors, ranging from an apartment complex that was overbilled by $1.4 million for its water service to a pair of meter readers who were fired for simply making up numbers to put on customers' bills. The mayor has taken some steps to correct those situations, but they raise the question: What other costly errors is the city making that are simply going undetected?

In its letter of opposition to Mr. Stokes' proposal, the finance department concludes that it is unclear whether the benefits of mandatory, biennial audits would outweigh the cost. Ms. Rawlings-Blake has seen the value in going after people who, due to errors by the city or state, are paying too little in property taxes. She established a billing integrity unit with the aim of collecting that untapped revenue, and she fought this year to protect funding to add more inspectors to it. But a penny in wasteful spending found by an audit is just as good (actually, better) than a penny collected in taxes. Anne Arundel, Baltimore and Harford counties — all demonstrably tighter with a buck than Baltimore City — have found the expense of audits to be worthwhile. Why not Baltimore?

It probably hasn't helped matters that consideration of this amendment comes at the same time that Ms. Rawlings-Blake has been feuding with Comptroller Joan Pratt over the purchase of telephones. Mr. Stokes' proposal calls for auditors not only to make sure the books are balanced correctly but also to offer recommendations for the more efficient operation of city agencies, and that could well produce a steady stream of critical reports, at least in the first few years. Perhaps Ms. Rawlings-Blake views this charter amendment as an invitation to embarrassment at the hands of a political rival.

But taxpayers aren't likely to see it that way. Residents who pay the highest property tax rates in the state would surely love to hear that the city was investing in an effort to make sure their money isn't wasted. Rather than being killed outright, this bill was sent back to committee, where it is unlikely to be resurrected unless the mayor reverses her position. We hope she does. Regular audits would more than pay for themselves — both in the money saved by the city and in the confidence they would buy for city residents that their government was operating just as efficiently as those in the suburbs.

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