Dear 2UrbanGirls,
I beg of you to make sure your readers actually READ the Internal Control System audit released by State Controller Betty Yee’s office May 2020 which examined the city’s finances for the period of October 1, 2016 through September 30, 2018.
The city authorized writing off debt in the amount of $451, 966.16 for uncollected Transient Occupancy Tax (TOT) August 18 but it’s been sitting on the city’s books since 2010.
In a NORMAL accounting office, bad debt is written off the books when it is turned over to the debt collection agency. At the time the city did not have a contract with Marigold Financial who served as the city’s collection agency.
The state audit discovered that the city failed to monitor the aging report, which is a report showing the accounts moving from 30, 60, 90, 120+ days past due. Once they hit 120+ days those accounts should have been turned over to the collection agency and immediately taken off the city’s AR.
“Do all cities experience receivables that are due from either TOT taxes or sales taxes not remitted by businesses is something that is common,” asked Mayor Butts? “And do cities leave these items on the books for years with the intent to hopefully collect them?”
“They will keep them on the books as long as they do until they exhaust all attempts to collect them,” said Koike. “We send invoices to people we have on record and presented that data to collection agencies that could not collect due to either having incorrect data or being too old to collect on.
How does Sharon Koike LIE to the public that the debts couldn’t be collected due to lack of information? Did the motels in the city pick up and disappear overnight? Did the businesses/homeowners with false alarms move out the city? Are code enforcement officers issuing false violations intentionally?
The city’s municipal code allows for the city’s accounts receivable staff to physically go to businesses to perform audit functions.
By the city’s own admission, they created a collection policy on 9/12/2017, to address the proper monitoring and writing off of debt, but failed to do so until three years later? Does anyone know if the AR was leveraged for a bank loan?
When Wanda Brown speaks on the ineptness of the Finance Department, this is what she is speaking of. People being hired with zero accounting knowledge and promoting staff to finance supervisors who barely hold a high school diploma.
For Mayor Butts to say Ms. Brown doesn’t know accounting he made a fool of himself. Ms. Brown is reading directly from the state audit. Is he calling Betty Yee’s office incompetent too? Read for yourself.
By the way, where is our Chief Financial Officer David Esparza? Shouldn’t HE be providing updates regarding the city’s finances? There has to be a reason why we haven’t heard from him in MONTHS.
Accounting aficionado
05-2020_lga-lgo_cityofInglewood
3 Comments
So David Esparza has been Chief Finance Officer since 2013 and in seven years hasn’t learned how basic accounts receivable write offs are supposed to be handled .
MAYBE there is an explanation
– how about a half million bucks doesn’t seem like a lot of money ? After all the $438,017.00 over seven years is no big deal … ones perspective changes as being paying for groceries becomes less of a challenge – – David by himself (no other employees included) cost Inglewood taxpayers $427,572.67*. LAST YEAR – as in one year not not all seven years!
To be fair, part of that is for his health benefits and pension – but still at $315,000.00 per year salary it is hard to relate to the residents making a tenth of that so he can live the high life..
Perhaps Mayor Butts would like us to each deprive our children more to reward the other execs
How about this concept his Assistant Finance Director is the Second highest paid Assistant Finance Director in California ,
Clearly keeping the peasants away from city hall has advantages
A) they can’t complain if they can’t get in
B) they can’t complain if the operator claims there is no one on the line
C) and if they have limited access to information and their elected they can easily be ignored
They have exchanged their integrity for money. Mayor Butts knows their weakness and exploits it to benefit himself. Problem is, the treasurers seat has zero value to him. Have you heard of a city clerk being covered under the employees union? Yvonne Horton does. She also gets to retire and give the city $6500 in exchange for the city paying her medical premiums for LIFE. City Clerk wields a LOT of power. You think it’s a coincidence Butts continued to get more and more votes under Horton? What can the treasurer do? Poor Wanda can’t get the same as the others because her seat has no ability to be manipulated for Butts’ gain and that’s a good thing!
Thank you for sharing for an accounting perspective how accounting departments should function!!
Clearly lack of performance should have earned David Esparza a farewell notice rather than pay raises and bonuses year after year. But then again given his role in the misuse of public funds intended to help the poor while employed at HACLA -housing authority of Los Angeles, of public funds, he probably would not have been hired by any group who desired someone with integrity
Koike has good reason to support anything James Butts says. Her job history shows that she has been surrounded by corruption in prior jobs at the Central and West Basin Water Districts – where she was controller…..she may have never worked in a properly operated and transparent agency.
The residents of Inglewood should not be expected to reward these highly non functional employees the roughly $26,000.00 a month for David Esparza and $14,000.00 a month for Koike (benefits not included) to make Mayor Butts feel good by agreeing with his misrepresentation.