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LB's City Auditor Says Queen Mary Repair/Maintenance Issues Not Her Job


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(Oct. 25, 2019, 4:55 a.m.) -- In an email to a LB taxpayer, LB City Auditor Laura Doud's office argues that millions of dollars in maintenance and repairs that were allowed to accumulate on the City-owned/City-leased Queen Mary weren't and aren't her job.

In an unsigned October 24 email obtained by LBREPORT.com, the City Auditor's office tells a Queen Mary preservation advocate that although the LB City Charter charges the City Auditor's office "with conducting performance and other related audits of City operations," in order "[t]o maintain the objectivity of our audit work, the City Auditor’s Office is independent of all City operations" and "the City Auditor’s Office cannot manage or oversee any service, operation or work unit within the City government."

The City Auditor's office email acknowledges that "[a]t times we may meet with City departments to ask questions about City operations" and "[w]ith respect to the Queen Mary, we have met with the City’s Economic Development Department to obtain information on capital improvements underway at the time" but states that "the Economic Development Department, not us, is the party responsible for overseeing all restoration projects on the Queen Mary."

The Auditor's office email came in response to a media release by QMI (a 501(c)(3) non-profit group) that proposed to collect donations to assist in Queen Mary repairs. The Auditor's office requested that the group remove from its release a statement that "citywide oversight will be managed by the City Auditor's office" and to "remove from your campaign materials all references to the City Auditor's Office as providing 'oversight' of restoration or capital improvement projects on the Queen Mary, as this statement is inaccurate."

LBREPORT.com notes that Section 803 of LB's City Charter states the following regarding the duties of the City Auditor

The City Auditor shall be the general auditor of the City and of every department, commission and office thereof. The City Auditor shall have the authority to conduct performance audits of City departments, boards, commissions and offices. Performance audits are defined as independent assessments of programs, functions, operations, or management designed to enhance performance, cost savings, efficiency or service improvements. The City Auditor, as often as the City Auditor shall deem it advisable, but in any case at least once in each fiscal year, and at such other times as the City Auditor shall be directed by the City Council, shall carefully examine and audit the books, records, accounts, funds and securities of all departments, boards, commissions and offices of the City for the purpose of determining: the accuracy and correctness of such books, records and accounts; that the City and Commissions thereof are receiving all monies, of whatsoever nature due it or them; and that such monies are allocated to the funds entitled thereto. Immediately upon the completion of such examination and audit, the City Auditor shall make and file with the City Clerk and City Council, a written report thereof. If, during the course of such examination and audit, the City Auditor discovers any irregularities, the City Auditor shall immediately make and file a written report thereof to the City Clerk and City Council.

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City Auditor Doud is LB's longest serving citywide elected official, taking office in mid-2006 after charging LB's former City Auditor hadn't done enough to address issues with the City's then-Queen Mary lessee. During her now-thirteen years in office, millions of dollars in repairs were allowed to accumulate at the Queen Mary with now costly taxpayer consequences that could ultimately imperil the historic vessel.

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In 2016, as part of a new 66 year for a new QM lessee (Urban Commons), city management offered the City Council a plan to allocate roughly $23 million in public funds for QM capital improvements to cover multiple needed repairs. Councilwoman Suzie Price recommended, and City Auditor Doud indicated her willingness, to review the transaction prior to the Council vote. The Council declined and voted to approve the lease (with Price dissenting.)

LB city management has now acknowledged that the QM repair funds are depleted (fire safety system repairs cost $5 million more than anticipated) and millions more are now needed to complete remaining repair/maintenance items, some of which a city-retained engineer has opined are now necessary to save the ship. LB city management has indicated that it's working with the lessee to come up with a plan to address the issues.

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In 2017, Mayor Garcia asked City Auditor Doud to conduct an performance audit of LB Animal Care Services. Her office did so in a two-part performance audit and offered multiple recommendations to city management and the City Council.

In June 2018, City Auditor Doud joined Mayor Garcia in proposing four City Charter Amendments, one of which enabled the Mayor and Council incumbents to seek third terms without facing LB's former write-in requirements. (City Auditor Doud argued that it would close a "loophole" that allowed incumbents to seek endless terms by meeting the write-in requirement. In the March 2020 election cycle, two Council incumbents, Andews and Austin, are now using the Charter change to seek third terms without facing the write-in requirements and Mayor Garcia has signaled he'll seek a third term in 2022.)

Another Charter Amendment gave City Auditor Doud's office explicit authority to conduct performance audits...although Ms. Doud publicly acknowledged that her office already had that authority and had already conducted a number of performance audits (including the Animal Care Services audit.)

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The City's FY20 budget documents recite the following as the City Auditor's office goals:

Goal 1 Promote transparency, accountability and efficiency in City operations.

A. Apply professional audit services including:

1. Financial Audits
2. Revenue Audits
3. Performance Audits
4. Contract Reviews
5. Lease Reviews
6. Internal Control Reviews
7. Fraud Investigations
8. Benchmarking Studies
9. Economic Analysis of significant transactions and business deals

Goal 2 Provide independent assurance that public funds are spent wisely and responsibly.

A. Audit all pending payment vouchers and wire transfers for compliance with applicable statutes, City policies and regulations, lease agreements and any and all applicable contractual provisions.

B. Strive to provide next day approval on all payment vouchers submitted.

Goal 3 Prevent and reduce fraud, waste and abuse of City resources.

A. Provide an easy confidential process for employees, vendors, and citizens to report misuse of City resources.

1. Provide live, independent interviewers 24 hours a day, seven days a week.

2. Facilitate direct reporting to the Office of the City Auditor of fraud, waste, and abuse of City resources via mobile app, telephone, mail, fax, and email.

3. Review and take appropriate action on each reported incident.

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