Wednesday, May 17, 2000
No money lost in street deceit
Auditors blame bad management for discrepancies
By Robert Anglen
The Cincinnati Enquirer
Private auditors say bad management, faulty procedures and inconsistent measurements allowed Cincinnati engineers to exaggerate the number of city streets fixed for seven years.
While engineers misreported $15 million of repair work that never got done — leaving about 60 percent of the streets in poor condition — auditors repeatedly said Tuesday that no money is missing and all of it went to road projects.
The volunteer auditors didn't say what caused the $15 million slated for road rehabilitation projects to be used for other types of road work.
Instead, auditors told City Council's Neighborhood and Public Works Committee they wanted to concentrate on improving streets and accountability.
But Transportation Direc tor John Deatrick said if the $15 million hadn't been diverted, about 358 miles of roads could have been repaired. He has identified 25 projects that got rehabilitation money that should have been paid from other sources.
Mr. Deatrick said engineers tapped into funding sources they shouldn't have, including road rehabilitation, to fix particular streets at the request of council members and community councils.
Road rehabilitation is considered to be typical mainte nance, while street improvements are more elaborate and expensive projects that could include reconstruction and widenings.
“The important thing is that the money was all spent on streets,” said Peter Gomsak, a recently retired partner with PricewaterhouseCoopers.
Mr. Gomsak, Gregory Bier of Deloitte & Touche and John Souza of Procter & Gamble Co., were asked by council to review the road repair reports after the city's internal auditor reported in December that the council had been lied to about the amount of road rehabilitation work from 1991 to 1997.
In that time, city engineers reported 818 miles of road had been repaired for about $65 million. The city's internal auditor found 460 miles had been completed for about $50.5 million.
Although road repair reports were being reviewed by the Hamilton County prosecutor, the city's internal auditor and the Office of Municipal Investigation, Mayor Charlie Luken said in February he wanted the auditors to determine what went wrong and who was to blame.
“At least we have verification no one stole any money,” he said.
The report assessed no blame by name.
City officials have blamed former City Engineer Doug Perry for making false reports and his supervisors for not catching it. Mr. Perry has denied any wrongdoing.
Three of his supervisors have been on paid administrative leave since January. Hearings are pending.
Auditors said Mr. Perry's reports could not be duplicated and it was unknown how he came up with the numbers given to council.
Auditors made several recommendations about changing internal controls and hiring an outside management firm to evaluate the current operations of the street rehabilitation and improvement programs.
Most council members accepted the report and the recommendations, but Councilman Charlie Winburn said it didn't go far enough and he wanted another independent audit to review individual expenditures.
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