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Do not consolidate SLO County financial offices

May 13, 2013
Karen Adams

Karen Adams

Letter from KAREN ADAMS to the San Luis Obispo County Board of Supervisors

As the Merced County Treasurer-Tax Collector, I request that you do not approve the consolidation of Treasurer-Tax Collector with Auditor-Controller. I testified at the California Senate Local Government Committee Hearing “Prudence and Economy: Rethinking State Limits on County Offices” on March 17, 2010 and was published in their committee report opposing incompatible consolidations of offices.

The Committee’s White Paper also cites the “incompatibility” doctrine that exists when there is a “clash in duties”. It is unreasonable to suggest that any consolidation where the 1st party who provides “oversight” on the 2nd party can effectively continue to provide impartial value after the consolidation causes both previous parties to become one. These consolidations are not in the best interest of the taxpayers and have not been approved by the citizens through elections.

For a successful election to be held, the citizens should be made aware of the potential asset risk. A current example of potential loss due to lack of oversight was published in the July 2012 issue of Budget & Tax News. The article title “FBI Says Dixon Official Stole $53 Million.” reported the comptroller’s ability to embezzle over a period of 6 years.

While I am genuinely sympathetic about San Luis Obispo County’s budgetary constraints, I cannot support your consideration. I personally have experienced a consolidation which was not in the best interest of the Merced taxpayers. Initially the proposed consolidation was for Treasurer-Tax Collector and Auditor-Controller, but I successful provided evidence convincing the Board not to approve the incompatible “clash of duties” consolidation.

Eventually a consolidation of other offices under Treasurer-Tax Collector was approved without my support. The consolidation was not approved by the voters. Even though the clash of duties did not exist in my consolidation, there was a lack of adequate appropriations necessary to provide true efficiencies, oversight and management.

Please review the attached that was also provided to the Senate Local Government Committee. The California Association of Treasurer, Tax Collectors has proposed legislation that will eliminate consolidation issues without voter approval within the Code. It was my intention to speak personally before you on May 14th, but I have Merced County commitments that prevent me from appearing. I am available for questions.

Karen D Adams, CPA is the Merced County treasurer-tax collector.

 


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No matter how correct I may be, the opinion I share is forged with input from a retired employee from one of the departments discussed. We do need government to maintain civility, similar to our need for lawyers. As is the case for both forms of representation, the benefit needs to justify the price we pay. Consolidation is the only way government can be re-invented and cleansed of it’s waste.


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It’s government 101, folks. The guy who collects the money shouldn’t be the same guy who is responsible for making sure it’s all there.


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This bone head common sense sounds good but conflict of interest 101 says that independent does not mean another office upstairs.


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What a super horrible idea to save only $300K?


That is not consolidation, it’s merging and not saving anywhere near enough.


Bad deal as it stands.


“and identify opportunities to consolidate functions” Bullshit.


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It’s worse than that. If you read the “plan” it’s only like 150K and MAYBE 300K someday…


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Oh please, everyone cries when their ax is gored… but the reality is that government needs to do more with less and less. I think if things were scaled back to 1990 or 1980 levels, we wouldn’t miss a beat.


After all, this is the way the rest of the world works.


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Our Federal Government has three branches set up for checks and balances, and they’ve never lost a dime…


(read: no-talent thieves and hacks will always thrive in government and steal, lie and cheat).


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A system of ‘checks and balances’ trumps consolidation when moving money is involved. Humans have difficulty in not becoming greedy.


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Separation of powers is critical for checks and balances.


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If her opinion is the best way to determine how we structure government then we can all be expected to ask the fox how to build a chicken coop.


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You “anti-government” types never cease to amaze me; here is a dedicated person who works to serve the public interest and because she has put forth her professional opinion that allowing elected officials to change the structure of county government without voter approval, you think “her way” is somehow wrong? When there is less accountability, less oversight in place, that is when corruption can occur. I know most of the anti-government types assume that all government is corrupt, but your believing it does not make it so; many agencies do their day-to-day work very diligently, following the rules, observing the protocols of how the job is supposed to be done, but apparently that isn’t good enough for those who think that all government is corrupt or inefficient. You certainly have a right to your opinion, no matter how incorrect it is ….

While I understand that government operations can certainly grow to be too large and cumbersome, I also believe that many who work in government truly want to earn their wage by doing their job well.


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This is indeed a problem of trade-offs. Any large bureaucracy — government, corporate or otherwise — needs to separate financial functions to some degree to make corruption and embezzlement harder to do and easier to detect. In the process, they become less efficient sometimes to the point that they counterbalance any efficiencies gained from scale of operations. It is a balancing act to find the right blend of efficiency and fiscal security.


If we consolidate these positions, how long before some smart crook gets into a position where they can embezzle a few million dollars and abscond to a nice tropical paradise with weak extradition laws before they are discovered? Given the history of low-level greed and corruption in our county government, I would guess that it will happen within a decade. Is this a risk worth taking to save a few hundred grand? I don’t know because there are chances that it won’t happen with consolidation and chances that it could happen even without.


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Your analogy may be only half right and it may be completely wrong. We have no way of knowing whether Karen Adams is a “fox” (in the predatory sense) or not. What she states is based on widely accepted fiscal wisdom in the accounting world: namely that dividing fiscal functions in an organization reduces the chances for embezzlement and increases the chances of detecting it if it occurs.


If she is merely applying that accurately to the issue at hand, she may be giving good advice. If she is spinning it to keep more government positions available for people in her field, then you may be right.


However, combining the positions also gives any other “foxes” out their an easier way to “raid the chicken coop” so which risk is greater.


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