State Comptroller finds waste and abuse in Atlantic City

by: Hopeful

Wed Jan 27, 2010 at 03:39:01 PM EST

The State Comptroller has just released a devasting report on the "financial management practices" of Atlantic City's government. Both a press release (PDF) and the full report (PDF) are available. The report, by the way, includes a response from Atlantic City's on corrective measures alread taken.

Arguably, the worst part is that state laws to prevent abuses are repeatedly not followed. Furthermore, I think we all know wasteful (or corrupt) abuses is going on elsewhere.

Here are some of the findings of the report I found most troubling:

The personnel structure of the City Council is contrary to State law. Specifically, based on the City's population, City Council members should not have aides. Yet, there are 11 such individuals employed at a cost to the City of nearly $484,000 in 2008. They have little to do and there are few controls over their time and attendance.

The City's payroll practices are vulnerable to abuse. For example, one individual was reportedly "volunteering his time" for the City, yet we found him on the payroll at a salary of $51,500. We further found the City had waived the required 60-day waiting period for the individual's eligibility for medical benefits.

City police officers received fiscally imprudent buyouts for their accumulated leave balances upon promotion. Compounding this situation is the granting of extended sick leave to officers which could last for periods of more than one year. We found that for the 15 officers most frequently taking advantage of this benefit, the cost to the City was $1.8 million, or nearly $122,000 per officer.

The City's external auditor did not maintain its independence as required by GAGAS... Simply put, the audit organization may not audit its own work.

Hopeful :: State Comptroller finds waste and abuse in Atlantic City

Parts of the city government seemed to be helping illegal scams where tourists are directed to expensive limousines instead of cabs in exchange for kickbacks:

On December 12, 2008, the Executive Assistant in charge of the Section distributed an order to the License Inspectors regarding the Code section noted above. Pursuant to the order, License Inspectors are forbidden to issue citations concerning the above City Code provision and are instead directed to submit a report of any such incident to one of the two Chief License Inspectors. This order appears to create a barrier to Code enforcement and allows the unlawful practice described above to continue.

By the way, while we're evaluating others' work, I wonder why the State Comptroller's office set a password on the PDF press release that prevents anyone from copying quotes out of it. Too bad, I would have used the quotes if they didn't go out of their way to make me type it over.)

Jim Whelan has already out out his reaction: "I've been calling for a larger State role in the operations of Atlantic City for some time now, because I believe we have a responsibility to local residents to demand more accountability for runaway spending and the rampant waste of tax dollars"