Editorial: Mismanaging public’s money

Given the recent financial management issues uncovered within the city of Lawrence, it was disheartening but not surprising to learn the city had not collected about $430,000 in payments owed to it by Douglas County.

The county and city share the costs of running the Lawrence-Douglas County Planning Department. On Tuesday, City Manager Tom Markus told the City Commission that it was recently determined that the county’s payment had not been received for the past three years.

“I suppose it suggests that both of us don’t have very good accounting when we don’t recognize that we haven’t been paid and they haven’t paid us,” Markus said. “But I’m not wishing to get into their situation; I have enough of my own to deal with.”

County Manager Craig Weinaug said, in each of the past two years, the county inquired about its one-sixth share of the Planning Department costs but never got a response from the city.

The Planning Department billing error comes a few months after the city disclosed it had failed to bill tenants of Riverfront Plaza for years. Those unbilled payments totaled about $250,000.

And last month, the city revealed that it had not properly invested a trust fund it manages as part of its ownership of the former Farmland Fertilizer Plant. The city acquired the plant in 2010. The city paid nothing for the property and received an $8.6 million trust fund to pay for remediating decades of nitrogen fertilizer spills. The city accepted full responsibility for the cleanup, estimated at $13 million.

The plan was to use interest earned on the trust fund to pay for the cleanup. But there were two problems: The city grossly overestimated the interest it would earn, and the city left about $4.6 million in trust fund money in a non-interest-bearing account for all of 2016 and most of 2017.

The financial problems have come to light thanks to the auditing work of RSM Global, who warned early in the audit process that the city was plagued by poor recordkeeping, insufficient employee training and a lack of oversight and that more problems were likely to emerge.

It should be noted that many of the financial issues pre-date Markus, who has been on the job for about 18 months. And Markus has been transparent and open about confronting the issues that have arisen. But he also understands that getting the financials in order has to be a top priority.

“It’s all going to come back to me eventually,” Markus said, “I have to make sure that this stuff is taken care of.”

Given the carelessness with public funds that has already emerged, it would not be a surprise if RSM Global uncovers more problems before it finishes its audit next month. Hopefully, the city can move quickly to get the right financial practices and personnel in place to correct these issues for good.