Border City Finances Boggle the Mind

Something is off in Lloydminster. No one wants to talk about it and very few are even paying attention. Indeed that is just the way they like it. No one is willing to ask tough questions and there are absolutely no answers forthcoming. There is a lot to unpack from the last couple of weeks but before I do I would like to say that when I was writing about the City’s contract with Jeff Mulligan many people were outraged about both the contract and the lack of response from the city. The 4 people in the room, the media, everyone had out their pitch forks demanding answers. I was being encouraged and baited to keep going. Letting me know every time Jeff peeked his head out on twitter. Condemning the city council and administration for not being transparent and forthcoming. Three months in and here they are doing the exact same thing!

Lets look at this so called $4.2 million dollar “clerical error”.

First of all it was not the finance department which discovered this “error”. I know, because I am the one who found the discrepancy. Not only did I find it but it took me less than a day, while it took the city 53 days. I also told a reporter and a city councilor.

As of February 18, 2017 at 11:29AM the December 2016 Accounts Payable document had not even been released to the public. I know this because I had been checking for it and tweeting about it for weeks.

By Sunday morning, February 19th, 2017 at 7:35AM when checked again it was live. Not only was December 2016 available, January 2017 was also available. They had quietly released these documents on the weekend.

Here is a couple of questions:
1. Is it City policy to quietly release these documents on the weekend?
2. Why did is take 1.5 months to release? (50 days)
3. How is it December took 1.5 months and January only took 2 weeks?

One of the very first things I learned as a programmer was something called regular expressions. The very first book I bought is called Mastering Regular Expressions. This is a function of any programming language which allows you to create algorithms to search through data.

I decided to take a closer look at the Accounts Payable for November 2016, December 2016 and January 2017. These are the three documents released under this new council. No human would double check any of this for errors so I decided to write a program using PHP, a common programming language for web applications. November 2016 was an immediate problem because the PDF did not contain selectable text that could be searched. December and January did so I went ahead and started with December 2016.

It did not take me very long to determine that something was a miss. I shared my findings with the same local reporter and a city councilor and continued to deconstruct these documents and tweet my findings. My calculations which took the totals of each vendor block added up to $8.4 million dollars while the city was reporting $4.5 million. A $4.2 million dollar mistake.

For two more days I analyzed the expenses and found many, many issues and things that just don’t make sense and things that don’t add up. Again I told both the same reporter and councilor. Nothing was reported and nothing happened.

Finally on Wednesday, February 22nd, 2016, after 3 days of tweeting and pointing out “errors” they updated December 2016. Oddly they also updated November 2016 as well. The new total for December 2016 was now $8.8 million. It was $400K more than what I had calculated but it hey, at least it was in the ball park now. Before I could blink they revised December 2016 again and had on the surface just reverted back to the original numbers but something was slightly different. It only had a single decimal place and was one page longer than the previous two versions. Again, before I could blink it was updated again back to the $8.8 million. Something odd was going on in the city finance department.

I have all 3 versions of December 2016 downloaded and both versions of November.

So here we have three different Accounts Payable documents for December 2016. They had finally seemed to settled into the $8.8 million in cost for December 2016. The newly updated November 2016 was also now in a format that I could extract the text. So now I had November, December of 2016 and January 2017 in text format. I also went ahead and also downloaded the entire year of 2016 to analyze.

For now I wanted to keep my focus on just the November, December 2016 and January 2017. I started to look at January 2017 and noticed a “project” which received 75% of it’s 2017 funding before the 2017 budget was even passed. The budget for 2017 was passed on January 30th, 2017. I also combined the months of December and January to see a two month spend total for each vendor which I tweeted the Top 40 city expenses.

The people of Lloydminster have heard for almost a year now, if not longer, that new software is coming that will make the city’s expenses more transparent. As a developer myself I am fully aware of what would be involved in making this happen and I can assure you something is seriously, seriously wrong. I can also tell you that December is not the only month that does not add up. The entire year of 2016 has a significant number of “errors”.

Why is there so many errors and what is the deal with this new software?

I calculated the amount spent on software for December & January and it worked out to over $40K. I then calculated the amount spent on software for the entire year of 2016. It comes to a whopping total of $493,134.33. That’s right the City of Lloydminster has spent half a million dollars on “software” in the last year.

Let that sink in.

The city spent half a million dollars in software for the year of 2016 and after sitting on December 2016 for a month and a half, they managed to make a $4.2 million dollar mistake.

Today, February 27th, 2017 a full week after I posted about the $4.2 million dollar hole and 5 days after the city corrected it, a news article was posted on MyLloydminsterNow about this matter. There is a number of quotes I find fascinating beyond taking credit for finding the “error”.

“They manually type out a summary sheet for it, and that’s where the issue came. They actually just loaded in November’s summary sheet, without updating to reflect the numbers in the cheque register. Moving forward, it’s just the additional check and balance through the personnel to make sure that the General Manager of Finance (Scott Pretty) has that final look before it actually hits the website.”

Manually? Really? The city spent half a million dollars on software in 2016 and the finance department is manually creating spreadsheets for public consumption. Further, only now they are concluding that the General Manager take a peek at the documents before they are made public. Again, really? With the amount that has been spent on software, releasing these documents should be as simple as selecting a month or date range then hitting export. Period. It should have an API with actual structured data so that it can easily be verified and truly be transparent. These documents they release are a step above a fax. In some cases even looking like a fax with OCR recognition. This is perplexing to say the least.

The article also says that Director of Business Services and the General Manager were both on vacation at the time these expenses were posted online. I mean, c’mon! 50 days. No one could check and the 2 people in charge happen to be on vacation at the same time, on a weekend when the documents were posted. I mean it was odd enough it was posted on the weekend but none the less it was.

“I could understand why people might want to know, if you were one of the 16 people who viewed that document prior to it being changed,”

Trivializing this error by indicating that not many people look at these documents is not a very professional way of addressing this issue. Accountability is not something to be taken so lightly. The city had a month and half to catch this “error” before they published it and they did not. Not a single person from the finance department, who should have a solid grasp on the month to month expenses noticed a $4.2 million dollar hole. They had 50 days to make sure the numbers were correct. That is the real problem, not that only 16 people viewed the document.

Here are some more questions:
1. How can a project be funded for 2017 before the budget is even passed? 
2. Why does the city spend so much on software?
3. Why would anyone be “manually” creating spread sheets when half a million dollars was spent in software in 2016 alone?

The biggest take away from everything I have calculated thus far is that the city spends an extreme of money and that spending in many cases is questionable to say the least. There far more questions than answers and what exactly is city council doing about it?

In 2016 the City of Lloydminster spent more than an estimated $418,368.98 on consulting. I calculated this number with line items which contain the word consulting and there are more than this if you look closer. Descriptions in these documents can a lot of times be vague and it is not even clear what departments or projects these funds are for. The city books are a disaster.

“I think when we get to new financial software when there’s not so much manual entry, then you’re going to have less probability of error going out on a public document.”

Again talk about this “new financial software” that never comes to fruition, yet they certainly have spent a lot on software.

They have approved paying yet another “consultant” $60K as well as giving him $10K in expenses for an opinion in what is being called a “governance audit”. This audit is to take place the week of March 13th, 2017. One week? Surely for this amount of money it will take longer than a week right?

Between city council and city administration, there are more than a few people making healthy six figure salaries, yet no one has a clue how to review and control expenses, reduce the waste of tax dollars,improve the governance of the city and get some software figured out? I know I keep saying this but, really? A lot of this is common sense yet somehow the only answer they ever seem to come up with is to spend more, hire more consultants, raise taxes and user fees, even create new user fees. Oh yah, buy more software!

Honesty. Ethics. Accountability. Transparency. Integrity.

At what point exactly do these words kick in and mean something?