Few things in government are more important than ensuring public servants are responsible and thoughtful stewards of public money. That’s why the discovery of hundreds of thousands of dollars in missing lease payments to the City of Lawrence is so concerning.
And auditors with RSM Global expect the news to get worse before it gets better.
What is known so far is RSM’s initial assessment is that poor recordkeeping, insufficient employee training and a lack of oversight caused payments worth hundreds of thousands of dollars to go uncollected by the city.
The audit found that at least 10 leases of either city land or other property have missing billings or payments. The total value of the missing payments isn’t clear, but some of the leases listed are thousands of dollars per year and unsent bills date back several years.
Christina Churchill, an auditor with RSM, expects that the auditors will find more.
Lawrence City Manager Tom Markus ordered the independent audit last month after Riverfront LLC asked for a summary of payments owed to the city. Markus said when staff in the city’s finance department went through the financial records, they discovered there were invoices that were never sent. The city estimated that $287,000 in lease payments weren’t collected, though Riverfront owners dispute that amount.
The audit uncovered more lease payments that weren’t billed. Churchill said high staff turnover and mistakes made when the city went to a new billing system in 2013 contributed to the problem.
Credit the current city administration with being transparent in addressing the billing issues. It appears that the issues pre-date Markus, who became Lawrence city manager in March 2016, and City Finance Director Bryan Kidney, who began his role in February 2015. But it’s their job to clean the mess up and that has to begin immediately. The city can ill afford to lose hundreds of thousands of dollars because staff are new and weren’t properly trained.
And almost important as correcting the billing issue is continuing to look for irregularities. If leases went unbilled, unpaid and undetected for years, then it seems likely that more financial errors are likely to have been made.
Markus and his team are to be commended for trying to confront the billing problems head on, but their work is only just beginning. As RSM digs deeper into city records, it’s worrisome to think about what they might find.