City auditors smack Mayor Hales

Kari Chisholm

Auditors tend to be a reserved bunch, preferring the world of reports and tables to sharp retorts.

But when Mayor Charlie Hales decided that Portland could do without a Chief Financial Officer, he got a fast and sharp response from the city's elected Auditor and the outside firm that does financial audits.

The O's Brad Schmidt tells the tale. It starts with Auditor LaVonne Griffin-Valade, who noted that the plan to dump the CFO might not lead to any budget savings, and instead "might be nullified by potential risks and unplanned costs."

Hales responded, noting that there aren't any other cities in Oregon that "staff a position of Chief Administrative Officer (or City Manager, in that more common form of government), City Treasurer, AND a Chief Financial Officer?"

(He's apparently unaware that Portland is a smidge bigger than anyplace else in Oregon. Actually, Portland's population is just shy of the combined total of the next five cities combined -- Eugene, Salem, Gresham, Hillsboro, Beaverton.)

Well, the Mayor's snarky - and presumably intended-to-be-rhetorical - question drew quite the response from Jim Lanzarotta, a partner at the city's audit firm, Moss Adams:

[He] noted that Multnomah, Clackamas and Washington counties have all three positions, as does Metro, among most other "clients of any size/complexity."

Lanzarotta noted that he was unaware of any jurisdictions, other than small entities, that combine the top administrator and chief financial officer functions.

"And, when I have experienced a combination of the administrator/manager with the finance functions -- I have also experienced a stronger correlation with poor financial performance," he wrote.

Ouch. Don't screw with the auditors.

At this point, if Hales goes ahead with the plan to dump the CFO, any financial mismanagement down the road is going to land right at his feet.

By Kari Chisholm May 31, 2013