How did Philly lose track of $33 million?

Philadelphia Inquirer ^ | APRIL 27, 2018 | Claudia Vargas

[george76]

City officials are trying to figure out if $33.3 million is missing from the city’s main bank account.

The discrepancy is the amount the city reports having in its records vs. what bank statements show and was first flagged in the city’s 2017 Comprehensive Annual Financial Report (CAFR), released in February. But the problem wasn’t widely known to the public until the current series of budget hearings — in which Councilman Allan Domb has peppered every city financial official about the unaccounted-for funds.

“I’m flabbergasted,” Domb said as he questioned the city’s treasurer earlier this month. “There could be a theft. I don’t really know what’s going on.”

...

Both current City Controller Rebecca Rhynhart and former Controller Alan Butkovitz say it shouldn’t have reached this point.

...

payroll records were not reconciled between late 2010 and last July, when, city Treasurer Rasheia Johnson said, she discovered the problem and asked her staff to start reconciling them and also the main cash account. Dubow said there don’t seem to be any discrepancies in payroll records.

Still, Domb said the city needs to operate like a business and not slip on essential accounting practices. He said if $33 million was not accounted for in his business, he would stay up all night trying to figure out what happened.

“It’s really important now because we are asking taxpayers to pay more in taxes when we aren’t managing effectively and efficiently the current money that they have been paying us,” Domb said

...

Not reconciling accounts is an inducement for wrongdoing

[CIB-173RDABN]

I don’t fully trust online statements - I still get paper copies each month.

[CIB-173RDABN]

I don’t fully trust online statements - I still get paper copies each month.

[Seaplaner]

Just guessing...

Check to see which city officials recently moved into gated community mansions, drive lux cars, have labor union ties, and take frequent foreign vacays (to visit their money).

[Retvet]

Check Hillary’s bank account.

[SunkenCiv]

...payroll records were not reconciled between late 2010 and last July, when, city Treasurer Rasheia Johnson said, she discovered the problem and asked her staff to start reconciling them and also the main cash account. Dubow said there don’t seem to be any discrepancies in payroll records.

Of course not. It's called money laundering, and the cold trail leads to crooks who were "employed" by the city for the sole purpose of kicking back most of their unearned salaries to the head of their criminal gang. Thanks george76.

[Fightin Whitey]

No doubt lazy white men charging up coffee at Starbucks.

[ridesthemiles]

I am a life long bookkeeper/accounting person.

I have done bank reconciliations with 40 checks per month & with 6,000 +++ checks per month.

ALWAYS balanced to the penny.

Bank recs are the easiest part of most accounting. NO EXCUSE for this problem. Embezzlement-—find the perps.

[Thank You Rush]

Online is a daily running account of all transactions - easier to keep up with IMO and anything ODD jumps out at you immediately. Nothing is foolproof that’s for sure. As everyone says - we’re all taking risks just by being hooked up to the internet...

[ridesthemiles]

ANYTIME a company or entity has any kind of bookkeeper or Treasurer who DOESN’T want to go on vacation——start looking for embezzlement.

They are not be loyal to the company-—they don’t want anyone else to see the books.

I have been hired twice in my accounting years to work for a small company-—only to find out that I was following an embezzler. ONE had previously worked for 3 lawyers. She got them for thousands. They were so embarrassed, they did not file any charges.. Her next employer was the one who hired me—and I know we didn’t find everything she stole.

[Thank You Rush]

“”I am a life long bookkeeper/accounting person.
Bank recs are the easiest part of most accounting””

Same here - very fulfilling also....

I took a job once where the gal who had it before stayed on for a week to familiarize me with everything. When I brought up bank recs, she opened a desk drawer and pointed to the inside. I said, “What?” She said, “They’re all reconciled.” She was pointing at the cancelled checks from each bank statement neatly filed in numerical order!!!!!

[dfwgator]

Accountant (Michael Palin): Lady Chairman, sir, shareholders, ladies and gentlemen. I have great pleasure in announcing that owing to a cutback on surplus expenditure of twelve million Canadian dollars, plus a refund of seven and a half million Deutschmarks from the Swiss branch, and in addition adding the debenture preference stock of the three and three quarter million to the directors' reserve currency account of seven and a half million, plus an upward expenditure margin of eleven and a half thousand lira, due to a rise in capital investment of ten million pounds, this firm last year made a complete profit of a shilling.

Chairman (Graham Chapman): A shilling Wilkins?

Accountant: Er, roughly, yes sir.

Chairman: Wilkins, I am the Chairman of a multi-million pound corporation and you are a very new chartered accountant. Isn't it possible there may have been some mistake?

Accountant: Well that's very kind of you sir, but I don't think I'm ready to be Chairman yet.

Board Member (John Cleese): Wilkins, Wilkins. This shilling, is it net or gross?

Accountant: It's British sir.

Chairman: Yes, has tax been paid on it?

Accountant: Yes, this is after tax. Owing to the rigorous bite of the income tax five pence of a further sixpence was swallowed up in tax.

Board Member: Five pence of a further sixpence?

Accountant: (eagerly) Yes sir.

Chairman: Five pence of a further sixpence?

Accountant: That's right sir.

Chairman: Then where is the other penny?

Accountant: Er...

Board Member: That makes you a penny short Wilkins. Where is it?

Accountant: Erm...

Chairman: Wilkins?

Accountant: (in tears) I embezzled it sir.

Chairman: What all of it?

Accountant: Yes all of it.

Board Member: You naughty person.

Accountant: It's my first. Please be gentle with me.

Chairman: I'm afraid it's my unpleasant duty to inform you that you're fired.

Accountant: Oh please, please.

Chairman: No, out!

[ridesthemiles]

AMEN. IF you have to prove something in the future, your online records are only there for a few months....I have records back to 1963, since I have owned properties.

[Vaduz]

Some people wonder how under Obama 66 million came up missing.

[minnesota_bound]

Question every democrat. Always democrats.

[Fitzy_888]

It’s not like the money was on a pallet...

Wait, nevermind.

[hinckley buzzard]

I would guess that in many cities today, 33 million would be petty cash.

[Liz]

Here's how some $53 million was stolen in Illinois:

(HAT TIP WIKI) Rita A. Crundwell (born January 10, 1953) was the appointed comptroller and treasurer of Dixon, Illinois, from 1983 to 2012, and the admitted operator of what is believed to be the largest municipal fraud in American history. She was fired in April 2012 after it was revealed that she had embezzled $53.7 million from the city over 22 years.

HOW SHE DID IT--

<><>(A) On December 8, 1990; Crundwell opened a secret bank account---she named it named RSCDA (Reserve Sewer Capital Development Account), making it appear to be a city account. Crundwell was the only signatory to the sewer account.

<><>(B) She would have incoming city money deposited into an account called the Capital Development Fund (CDF).

<><>(C) She would then create false invoices, monies she falsely claimed the city owed the state.

<><>(D) She would then write checks to pay the "bills" from the CDF payable to “Treasurer,”

<><>(E) She would deposit the checks into the phony RSCDA account for her personal use later.

According to federal investigators, this relatively uncomplicated scheme continued for 22 years.

[MortMan]

Clintonomics.

[eyeamok]

Why is this so hard?

Simply declare the Money Stolen or Misused and Assess the Salaries of ALL Public Employees to claw back the money, say 10% for regular employee’s and 25% for Public Servants.