News

City Auditor's office faces staffing cuts

Palo Alto's Finance Committee recommends moving to private sector for performance audits

Update: On Wednesday, May 23, the Palo Alto City Council's Finance Committee reversed its recommendation to eliminate five of six positions in the Office of the City Auditor. Read the story here.

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City Auditor Harriett Richardson. Image courtesy city of Palo Alto.
The Office of City Auditor in Palo Alto would see drastic staffing reductions under a proposal that the City Council's Finance Committee recommended Tuesday.

Under the proposal, which the committee unanimously approved, the small office that conducts performance audits on various city departments will lose five of its six positions. The only position that will be retained is that of City Auditor Harriet Richardson, who will be now charged with relying on outside auditing firms to perform the office's tasks.

The full City Council is scheduled to review and potentially approve the staffing cuts next month, when it approves the budget for fiscal year 2019, which begins on July 1.

The Office of the City Auditor is the only city department that saw the significant shift during the Finance Committee's two-day review of City Manager James Keene's proposed budget, which includes a $214-million General Fund, an increase of 1.7 percent over the prior year. The proposed budget already cuts 16 full-time-equivalent positions, including 11 in the Fire Department.

The move to eliminate city auditors was prompted by Councilman Greg Scharff, chair of the committee, who said he was concerned about the recent level of productivity in the office. According to the budget document, the department completed 1.2 "work products" per audit staff in the current fiscal year, compared to 1.67 in the prior year.

"I think we're not getting the amount of audits we should get," Scharff said.

In making the motion to restructure the office, Scharff recommended that Richardson use 80 percent of the funds saved from the position reductions to hire outside firms to conduct performance audits.

His three committee colleagues -- Vice Chair Eric Filseth, Councilman Greg Tanaka and Councilwoman Lydia Kou -- all agreed to turn to the private sector for audits, which Tanaka called "a good move."

Richardson didn't offer any objections to the proposal, noting that it's not uncommon for government organizations to rely on outside firms for help.

"I will be picky in selecting those firms to ensure we get firms that get actual performance audit experience," Richardson said.

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Comments

31 people like this
Posted by Concerned Observer
a resident of Old Palo Alto
on May 17, 2018 at 10:29 am

Maybe independent auditors will get rid of some of the overpaid deadwood employed by the city, including a spokesperson for the current city manager or his replacement.. At his salary, Keane should be able to speak for himself


68 people like this
Posted by Member
a resident of Adobe-Meadow
on May 17, 2018 at 10:34 am

Why should the City Auditor be allowed to keep her job when it was her poor leadership that allowed for such low productivity?! Harriett Richardson is asleep at the wheel.


45 people like this
Posted by Skeptic
a resident of Downtown North
on May 17, 2018 at 11:36 am

Seriously? So the team is not productive. Doesn’t that reflect on the auditor? What were she doing all this while?
Now, she gets to hire a bunch of outside firms and sit pretty in her chair( with her dog by her side) and earn big bucks! She basically threw the entire team under the bus. Reflects poorly on the management.


2 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on May 17, 2018 at 11:46 am

@Member above obviously has no actual knowledge of this, never mind all the people who "liked" it.

Outsourcing that office may be correct, and there may be waste and deadwood in city hall, but Harriet Richardson is not part of it. If @Member actually knew any of these people or what they do, or any clue what constraints they work under, s/he would understand that and would go find some worthier topic to add value on.


18 people like this
Posted by Curmudgeon
a resident of Downtown North
on May 17, 2018 at 11:57 am

No surprise. The city auditor produces too many embarrassing findings which city hall has to quickly bury. It's a thankless job.


18 people like this
Posted by Need info
a resident of Crescent Park
on May 17, 2018 at 11:57 am

What are the constraints?
My impression has been that the Auditor is under the thumb of the City Manager. The office is very near his, and he tends to manage closely.

The Auditor's report tends to look like PR for the Manager.


16 people like this
Posted by Wayne Martin
a resident of Professorville
on May 17, 2018 at 11:57 am

The Office of the Auditor has been problematic for much of the time it has been in existence. One Auditor left under a cloud, with the Mayor (at the time) claiming he left voluntarily, when, in fact, he was paid a hefty severance to leave.

Sharon Erickson did a pretty good job, at first. But, after some years, she became unhappy with the lack of adoption of her team's recommendation. Her performance audit of the library was a shame, in my opinion. Ms. Erickson seems to be doing a great job as San Jose's Auditor.

One Auditor did an audit of the ethics of the City's workforce--and then disappeared. Another went on maternity leave and never returned.

Sadly, the Charter does not give the Council the power to direct the Auditor's work. Full performance audits of the Utility, Public Works, Police and Fire Departments need to be done periodically. It's unlikely that there is any low-hanging fruit in these departments. It's hard to believe that there will not be significant "pushback" from unions that have dictated to the City's management for far too long if such audits found significant problems in these departments.

While the current Office of the Auditor is supposed to report to the Council, it's not clear how much support the Council has ever intended for the Auditor to have. That question needs to be cleared up before any future Auditor will enjoy the approval of the city's residents and taxpayers.

A good auditor is needed for any large organization. This year's proposed budget is over $700M. There is little evidence that this Auditor will be performing audits that ensure the money is spent as intended, and not wasted. More audits and even more auditors are needed.


1 person likes this
Posted by Palo pal
a resident of Evergreen Park
on May 17, 2018 at 12:18 pm

[Post removed due to same poster using multiple names]


1 person likes this
Posted by Citizen
a resident of College Terrace
on May 17, 2018 at 12:29 pm

[Post removed due to same poster using multiple names]


31 people like this
Posted by The Insider
a resident of Downtown North
on May 17, 2018 at 1:18 pm

It's interesting that most of the staff in the current City Auditor's Office have been there long before Richardson became City Auditor. Most have been there through two City Auditors and two temporary/Acting City Auditors. Prior to Richardson coming on board, there was no problem with "productivity". The inside story is that Richardson [portion removed] can't keep up with the work that her staff is doing (work sits on her desk waiting for her approval while staff twiddles their thumbs), that she colludes with Management and the City Council (it's obvious that this "outsourcing" was her idea and that she colluded with the Finance Committee. Have you ever seen anything approved so quickly and with so little discussion?) [Portion removed.]

[T]his "outsourcing" is clearly retaliation against her staff. Richardson has a history of not staying anyplace for very long (save Palo Alto - lucky us!), which tells you about all you need to know. No, the audit staff does not need to be "outsourced". Harriett Richardson needs to be outsourced.


25 people like this
Posted by Concerned citizen
a resident of Barron Park
on May 17, 2018 at 1:41 pm

Harriet needs to take accountability. Her behavior is shameful.


5 people like this
Posted by Chris Gaither
a resident of Evergreen Park
on May 17, 2018 at 1:48 pm

The City should hire me to be its auditor. The first thing I would do, is set-up self-audit training for each department, so that each department knows how to audit itself prior to a major outside or inside audit. Having self-audits help people in the departments to research policy and procedures as to what they actually should be doing in their jobs for compliance on all levels - municipal, federal, state and with respect to its own department. I would be very effective, with results, and the salary and benefits would be great for me. This is what is called the Invisible Hand Theory - Adam Smith. Every one wins! Cheers, and think about it!


25 people like this
Posted by DL
a resident of Greendell/Walnut Grove
on May 17, 2018 at 4:31 pm

Throwing your staff under the bus and sneakily blaming them for your mismanagement so that you can keep your job at City Auditor is absurd, selfish and embarrassing.


13 people like this
Posted by Abitarian
a resident of Downtown North
on May 17, 2018 at 5:45 pm

While I have no particular insight into the City Auditor's office, I do feel one thing is certain.

Under the dubious ethical leadership of our current city manager Jim Keene, Mayor Liz Kniss, and the council members who unanimously selected her, there is no hope for honest audit and true reform.


14 people like this
Posted by frankie
a resident of Downtown North
on May 17, 2018 at 6:04 pm

The independent audit function, with public reporting, is essential. If the auditor and staff are woefully unproductive (who guards the guardians?), the remedy is to fire them all. Let's hope cutting these positions is the manager's / council's cowards way of cleaning house before a rebuild.


13 people like this
Posted by No accountability
a resident of Old Palo Alto
on May 17, 2018 at 9:20 pm

I don’t know much about the structure or the setup of her team. I would probably understand laying off the entire division as a cost cutting measure. But if the reason is productivity, then I can help but think,why is Richardson still in the office? Isn’t she responsible for ensuring work get done?

So if she is not accountable for her team’s output, then clearly she won’t be held accountable going forward as the blame will be placed squarely on private firms. Of course she did not object, because why would she? She can now shrug all responsibility and say that it is up to the private firms. Way to go..... something smells fishy.


6 people like this
Posted by Resident
a resident of another community
on May 17, 2018 at 10:50 pm

I once worked in an office where my boss left and they hired a person from outside the organization to replace him. A co-worker who expected to get the job but didn’t led a coup with the other employees against the new manager to try to get him fired. No matter how much effort the new manager put into trying to get the staff on track, they cut him no slack and sabotoged his efforts in many different ways. I believe that one of the interim city auditors before Richardson was one of the employees who is still there. Who’s to say that he hasn’t done something similar? I’m saying this because maybe there is more to this than what any of us know. I say stop the nasty comments unless you know the real story behind what is going on in the auditor’s office.


17 people like this
Posted by insider
a resident of another community
on May 18, 2018 at 4:53 am

Maybe the problem with productivity is the fact that the City Auditor commutes from Seattle and isn't in the office 5 days a week.


15 people like this
Posted by Concerned citizen
a resident of Barron Park
on May 18, 2018 at 7:19 am

If the City Auditor can’t be responsible for managing her staff, then she needs to go. No excuses.


11 people like this
Posted by M.W.
a resident of Stanford
on May 18, 2018 at 8:37 am

The city stands to saves only $108,000 be firing all by the City Auditor, who made ~$179,000 last year in salary. This is laughable and so corrupt.


24 people like this
Posted by Tall Trees
a resident of Professorville
on May 18, 2018 at 10:07 am

The City Auditor wants to cut all positions in her office except her own? Seriously? Something is way off here. What kind of boss recommends eliminating and then outsourcing her own staff? And that's all to save $108,000? Her position alone cost the City more than $200,000. Seems like if they go, she should, too. She doesn't seem to care a bit about putting people out of work - her own people. Because unlike many budget cuts, these are jobs with people in them not empty positions on an org chart.

There were no "productivity problems" until Harriet Richardson became the auditor. Some staff in that office have worked there for years, long before Richardson.And there weren't any problems with them. Looks like we are only hearing her side of the story. Palo Alto has had a proud tradition of an independent City Auditor. The office was created by voters in the 1980s. It has done some excellent work over the years and won many awards.

The taxpayers are not going to get that kind of work with an outsourced audit function. They'll get a drive by/spend as little time as possible and write a one-page memo. The City Council should ask the employees what they think about this and what's really going on. And if the Council wants to eliminate the five positions, they should eliminate Richardson's as well. She is too expensive for just overseeing an outsourced audit function.


20 people like this
Posted by what?
a resident of Midtown
on May 18, 2018 at 11:03 am

>the City Auditor commutes from Seattle and isn't in the office 5 days a week.

Wha???


10 people like this
Posted by senor blogger
a resident of Palo Verde
on May 18, 2018 at 11:34 am

So why are water rates going up almost 10 percent when the overall budget shows a 1.7 percent growth?


5 people like this
Posted by Resident
a resident of another community
on May 18, 2018 at 11:19 pm

The City Auditor’s Office website lists the audits they produced each year. Here’s the count for each fiscal year:

FY08-09 - 1
FY09-10 - 4
FY10-11 - 1
FY11-12 - 3
FY12-13 - 3
FY13-14 - 3
FY14-15 - 2
FY15-16 - 3
FY16-17 - 4
FY17-18 - 2, so far

They also did the performance report/citizen survey each year so you can add one each year for that, but I didn’t count the external financial auditors report that a CPA firm does. It’s easy to see that productivity has been a long time issue since well before Richardson came on board. The article says they would lose five positions. The list shows they usually did not produce even one audit per person each year even if you add in the performance report/citizen survey. That’s unacceptable. But Richardson got them up to four last year, five if you add in the performance report/citizen survey, so one per person. The website also shows the office’s quarterly progress reports. The last one posted is for December (where’s March?) and shows that they had four audits in progress that they expect to complete by June. That would be six audits this year plus the performance report/citizen survey. It seems like Richardson deserves some credit for increasing productivity!


13 people like this
Posted by What is the truth
a resident of Downtown North
on May 19, 2018 at 12:17 am

There is so much that we don't know about what goes on in the city offices and departments. It always appears that these people do very little and get paid a lot and have huge pensions. Is the auditor really not able to manage her staff or is the staff incompetent and has been hanging around for years and driving other directors of the office away.

It is virtually impossible to fire anyone who is a city employee. The union makes it impossible. So the director of the department may just end up leaving in frustration. Perhaps outsourcing is the only way to force incompetent people out of a city job. Give their job to an outside agency and they are now gone. Something that could never be achieved if the job remained in the city since you can't fire people.

So we may never really know what is going on here. Just a shame that we can't get the real story and it is just a bunch of made up stuff that people talk about without really knowing what is going on.


4 people like this
Posted by More to the Story
a resident of another community
on May 20, 2018 at 6:39 pm

Based on the City Auditor's website, productivity has been low since before Richardson came on board. In the Finance Committee, Councilmember Scharff asked Richardson what she thought productivity should be and she said six per year. That sounds reasonable for the office. Perhaps Richardson has been trying to raise the bar and staff are struggling to make that a reality. Also, it was Council, not Richardson, who suggested cutting staff. There’s a lot to this story that we don’t know. It seems unfair to attack Richardson without more information, especially since, under her leadership, productivity is better than it was before she became City Auditor.


9 people like this
Posted by The Insider
a resident of Downtown North
on May 20, 2018 at 11:06 pm

To: More to the Story - Based on the scant few minutes of discussion and the slight smile on Richardson's face after the Committee unanimously approved of the outsourcing, my guess would be this was just a Dog and Pony show. My bet would be that all of this was worked out ahead of time between Richardson and the Committee. Also, since when do government bureaucrats like "outsourcing" as a solution to anything? Answer: NEVER. Nope, this stinks to High Heaven.


7 people like this
Posted by The Insider
a resident of Downtown North
on May 21, 2018 at 12:17 am

To: "Resident, a resident of another community" and "More to the Story": It's difficult to compare and contrast the office's "productivity" pre-Richardson and post-Richardson, as there have been marked differences in the number of audit staff. Richardson has 5 full-time auditors. Pre-Richardson, the greatest number of auditors any previous City Auditor had to work with was 3.5 (3 full-time and one half time).


11 people like this
Posted by The Insider
a resident of Downtown North
on May 21, 2018 at 12:24 am

Former respected and beloved (well, as beloved as an Auditor can be) Palo Alto City Auditor, Sharon Erickson, is totally against this "outsourcing". On her personal Facebook page she says: "Palo Alto voters created Palo Alto's independent Office of the City Auditor in 1983 to serve as an internal watchdog over city operations. On Tuesday May 15th, after only a few minutes of discussion, the Finance Committee of the City Council voted unanimously to dismantle the office. That decision should be reversed! This is not the time in the history of our city or our country to diminish accountability in government."


18 people like this
Posted by Resident
a resident of University South
on May 21, 2018 at 8:28 am

Greg Scharff has again outwitted his colleagues by pushing through a very consequential change without thoughtful discourse by his colleagues and without any public input. His pattern of undemocratic and capricious actions seem to be accelerating by the month as he prepares for his next political aspirations. We have seen what an autocrat with an out of control ego has done in DC, we done need more of the same in our local government.


10 people like this
Posted by what?
a resident of Midtown
on May 21, 2018 at 2:59 pm

- Need more info on whether the Auditor lives far away or is out of the office alot.

- Sharon Erickson's post is very important. (see above message) I thought she was too sweet to the managers and that's why they liked her. But the present auditor is "sweet" beyond professionalism. I often don't trust super-sweet people. Too anxious to please the boss.

- Yes, Greg Scharff put another one over. I'm being cautious about any candidate he endorses. Especially if his "Gang" goes along with him. Developers rejoice.


Like this comment
Posted by Resident
a resident of another community
on May 22, 2018 at 1:09 am

@The Insider - "Pre-Richardson, the greatest number of auditors any previous City Auditor had to work with was 3.5." That is still barely one auditor per person. An audit should not take a full year to complete, so that count is still very unacceptable. Tells me that productivity has been an issue for a long time. Most likely Richardson tried to fix that but her staff has not been receptive to it and that is why Scharff proposed keeping her but getting rid of the staff. AS What is the Truth said, there probably is a lot more to this than what we know. And for those asking about her hours, unless you have proof that her "not in the office five days a week" means something other than the every other Friday that ALL of city hall has off, you are just adding to the rumor mill. People are entitled to their weekends, and if she is in the office on the same schedule as the rest of city hall, what does it matter if she has a home in Seattle. I can't imagine that she is commuting back and forth every day or few days.


5 people like this
Posted by The Insider
a resident of Downtown North
on May 22, 2018 at 1:50 pm

To "Resident - a resident of another community". You say, "Most likely Richardson tried to fix that but her staff has not been receptive to it and that is why Scharff proposed keeping her but getting rid of the staff." Boy, that's a lot of speculation for someone not affiliated with the office. You say you're a resident of "another community". Would that community be, ummm, Seattle?


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