Restoring Fiscal Credibility to Philadelphia:
Fulfilling the Legal Mandate to Audit Every City Department Annually
“The present Controller lacks the leadership qualities and desire necessary to
do his job – not the resources.” – Brett Mandel

The Problem

The City Controller is the watchdog for our money. The City Charter requires that the Controller
audit every city department on an annual basis.1 The purpose of this legal requirement is to
identify and prevent abuse or fraud in city government and to provide taxpayers and elected
officials with information on how our money is spent. Despite having more than 75 staffers
dedicated to the post-audit process, the current City Controller has refused to perform these
audits in a timely manner — if at all. He instead chooses to focus on his own pet projects,
which often have nothing to do with monitoring our tax dollars.

How does this affect us? As City Council and the Mayor spar over the 2010 budget and discuss
a hefty increase in Real Estate Taxes or Wage Taxes, the current City Controller has performed
no audits of any city department for FY2008. To date, he has performed only six departmental
audits for FY2007. His inaction has left the Mayor and City Council ill-equipped to make crucial
decisions.

The City Controller’s job is very specifically outlined in the City Charter, with the goal of
establishing an independent fiscal watchdog to identify and prevent any waste or fraud in
Philadelphia government. A Controller that does not follow the law is abandoning his duties as
an auditor and facilitating waste and fraud in Philadelphia government.

The Solution

As City Controller, Brett Mandel will make a thorough examination of each city department a
priority and eliminate the Controller’s superfluous Office of Community Affairs (created by the
incumbent to enhance his public image). He will thoroughly review all full-time staff positions
to determine whether resources could be better spent on the auditing process. Finally, he will
establish “Review Teams” — teams of auditors on the Controller’s staff, assigned on a rotating
and staggered basis, to audit specific City Departments each year in order to develop
institutional knowledge of each department and streamline the auditing process.

                                                             
1
The Charter provides that the City Controller “shall audit at least annually the affairs of every officer, department, board, including
the accounts of any board of directors of City trusts, and commission of the City and, as far as may be necessary, the accounts of
any other agency receiving an appropriation from the City." City Charter, § 6-400(c).

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 Mandel For Controller — Restoring Fiscal Credibility to Philadelphia: Fulfilling The Legal Mandate To Audit Every City Department Annually
 
Implementation

The Mayor’s Fiscal Year 2010 Operating Budget has appropriated funds for 123 full-time
employees for the City Controller’s Office. It is projected that the Controller will have 101
positions dedicated to Pre-Audit, Post-Audit, and audit support services.2 The Controller in
FY2008 had 104 positions dedicated to Pre- and Post-Audit services. Despite this rather
impressive team of auditors at his disposal, the City Controller has managed to release ZERO
departmental audits for FY2008 and only SIX departmental audits for FY2007.3

According to the FY2010 Operating Budget, the Controller will have approximately 54 auditors
in his Post-Audit division. If we assume that these employees have 37.5 hours available each
week for 46 weeks per year (accounting for holidays, vacation, and sick leave), they have a
total of more than 93,000 work hours available for auditing.

There are roughly 50 departments and agencies to audit each year in city government. After
allocating approximately half of all audit time to prepare the report for the city’s Consolidated
Annual Financial Report, the “Single Audit” of federal funding, and the audit of the School
District, the audit staff has ample time to fulfill its Charter-mandated mission. Split among the
54 Post-Audit employees, they would be able to dedicate more than 900 hours per department
for annual auditing. Our campaign has outside opinions from professional auditors confirming
that this should be more than sufficient to audit every city department.

As City Controller, Brett Mandel’s main goal will be to focus the resources and staff at the
Controller’s disposal in order to keep up with auditing every department on an annual basis so
we are best informed about how city officials are spending our money. The use of “Review
Teams” in the Controller’s Office would serve two important functions:

• First, it would establish a results-oriented auditing process that would help all
employees of the Controller’s Office understand their annual job expectations and allow
them to focus their efforts and work hours toward a predetermined goal. At present,
the City Controller seems to choose who and what to audit haphazardly, which can lead
to the misappropriation and underutilization of current employees.

• Second, assigning the same auditors to the same departments each year on a rotating
and staggered basis would allow the teams to develop institutional knowledge of the
departments they audit and streamline the process as they perform subsequent annual
audits. “Review Teams” would be responsible for more than one Department, much like
private sector auditors. By having one member of the review team rotate out to another
department audit each year, we can preserve that institutional knowledge while
guarding against compromising relationships between auditors and audit subjects.

The problem right now is leadership, not resources. The current Controller publicly declared
that his office’s primary focus is and will be performance auditing. While performance auditing
can be worthwhile, abandoning the Controller’s legal obligations leaves the Mayor, City Council,
the media, and the public ill-informed about the efficiency and effectiveness of agencies across
city government. With the Controller himself picking and choosing audit targets, he creates the
perception that he uses his choices to protect his friends and punish his political enemies — and
the reality that, without regular audits, fraud and abuse are more likely to go unchecked.

                                                             
2
http://www.phila.gov/reports/reports2.html
3
http://www.philadelphiacontroller.org — This is a good-faith estimate of the Controller’s actual audits. The “Reports & Audits”
section of the Controller’s website is difficult to research; it has a chronological list of press releases instead of direct links to audits.

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 Mandel For Controller — Restoring Fiscal Credibility to Philadelphia: Fulfilling The Legal Mandate To Audit Every City Department Annually
 
Trimming Waste

There are efficiencies that can be found in the City Controller’s Office. The current Controller
has opened an Office of Community Affairs, duplicating many of the services already provided
by several areas of city government.

The Office of Community Affairs is a blatant misappropriation of valuable resources. Brett

Mandel would cut the following positions:
• Director of Community Affairs - $92,700
• Deputy Director of Community Affairs - $70,928
• Assistant to Director of Community Affairs - $46,000
• Community Affairs Assistant - $27,000

These four positions represent over $236,000 in salary expenses (plus approximately $90,000 in
additional fringe-benefits costs) that can be reallocated to hiring additional auditors, or used to
avoid proposed tax increases or threatened service cuts.

There is additional spending in the City Controller’s Office that can be critiqued and changed,
including lucrative consulting contracts, expensive contracts for an official recently hired as a
campaign spokesperson for the incumbent Controller, and a “website enhancement” contract
that appears to have turned his official website into a self-promotional tool.4

As City Controller, Brett Mandel will perform a comprehensive review of all full-time staff
positions assigned to his office to determine which positions can be removed or reassigned to
performing annual departmental audits.

Conclusion

Auditing every department annually can be achieved by refocusing the mission of

the Controller’s Office. The current City Controller seems content with headline-grabbing
audits that do more to improve his name recognition and little to accomplish the actual mission
of the Controller, as outlined by our City Charter.5

Today, as we prepare a budget for FY2010, we do not have audits of ANY city departments for
FY2008 and only six departmental audits for FY2007 to guide our deliberations. Without crucial
information about how our tax dollars are being spent and where efficiencies may be found, we
are not able to find many solutions to the current budget crisis aside from service cuts or
potential tax increases. This is a severe problem and city taxpayers are going to end up footing
the bill for the current Controller’s decision to abandon his duties.

A renewed focus on the city’s finances is the key to successfully navigating our city’s budget
problems. The Mayor, City Council, the media, and the public would benefit from timely and
comprehensive audits of all city departments when they make difficult decisions about where to
find savings in our operating budget.

                                                             
4
$43,300 in FY2008 and at least $18,105 in FY2009 for consultants, $25,000 in FY2008 and at least $12,500 in FY2009 for Martin
O’Rourke for Media Communications consulting. $16,520 in FY2008 to Nimblelight for Web Design and Maintenance.
5
A recent Daily News editorial cited many “fictions” in the Controller’s SEPTA safety audit and opined that the report was made by
“someone eager for attention rather than one who wants to identify real problems based on evidence.” (Daily News, 12/1/08).

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 Mandel For Controller — Restoring Fiscal Credibility to Philadelphia: Fulfilling The Legal Mandate To Audit Every City Department Annually
 
Appendix

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 Mandel For Controller — Restoring Fiscal Credibility to Philadelphia: Fulfilling The Legal Mandate To Audit Every City Department Annually