Basic Shadow Ch. 04

When we last encountered our heroes, they were attempting to verify the father of Dee Dee's unborn child based on a comparison of approaches to lovemaking, an extensive, arduous but ultimately enjoyable task for them both.

Dee Dee's technical analysis had taken considerably longer than they'd thought, but it had been just as enjoyable as she'd expected. They had been required to do a great deal of comparative analysis. She and George were now both convinced that her mystery lover, the father of her unborn child, was none other than George himself, or perhaps the identical twin he didn't have, though how that might have been was a mystery yet to be solved. Until they checked his plane tickets, anyway. Not that they were going there.

Both of them were tired when they woke up, and a touch tireder yet after George had insisted on a further testing session, "just to be sure". Dee Dee had made no objection, and in fact had done a fair amount to make sure the testing session didn't fail due to poorly aligned instruments. However, they had to meet with the town officials and then the state people, which meant the second test session they both wanted had to be put off. Perhaps they could continue their analysis in the evening. Just to make sure of their tentative conclusions.

Advising the town officials that there'd been a thief in the town offices was fairly easy, even though the thief had been well liked and was, possibly, the only competent person in the administration. The further problems of incompetence in the administration, severe overspending, a poor audit function and inadequate, almost nonexistent, council supervision were harder to tell. The council members wanted nothing less than the best for the town. It was difficult telling them that they had failed badly as trustees of the public moneys and guardians of the community's future.

"So, do we go bankrupt? Dissolve?" the deputy mayor asked. "Is there a way forward? Can we get out of this mess?"

"Are you prepared to eat crow? Confess your sins? Take the high rough road? If you are, there's a way out," Dee Dee told them. "The alternative is for you all to resign and turn the mess over to the state. I doubt that will save the town, since they're at least part of the reason you're in this bind. Besides, bureaucrats want to reduce their problems, not increase them, and they'll be all agog to dissolve the town even if that won't help the taxpayers."

"We're going to have to have state aid, at least in the short term. We can't afford to insult the state people," the mayor noted.

"You just watch me," Dee Dee advised. "The last thing we need is to be nice to them. We want them to pour money at us to keep us afloat, and quiet, and that won't happen if we're all nicey-nicey."

"I don't know about the rest of you," one of the councillors said, "but I'm not letting the town sink on my watch. Whatever we need to do, I'm ready. Whatever amount of crow I have to eat, I will. And if I have to eat crow, everyone else who had any part to play in this mess is going to eat crow, too."

"Sounds like a plan," came from the senior councillor. "Mr. Mayor, please call for a show of hands. Will we go on and pull our town back from the edge of ruin with the help of these folks, or are we going to give up?"

The mayor called them to order.

"This is about as unofficial as a council meeting can get, so nothing's binding, except perhaps your honour. 'Aye' means you are all prepared to sweat blood until we get out of this. 'Nay' means we let it fall in on us. All those in favour?" A satisfactory roar.

"Opposed?" Silence.

"Well, Ms. Foster, we're in your hands," the mayor advised.

"My recommendation is that the head of the administration be let go, right now. You have cause, plenty of cause. I have no idea who can replace him, but you can't promote from within. There just isn't the staff capability to do it. Maybe someday some of them can be trained up to it, but no one has made any effort to try to bring staff along and the training budget was cut out at the then-mayor's insistence three years ago. You do have to have someone, even temporarily, to hold the ship together while you look for someone prepared to come into a challenge, but that someone just can't be the man we have or anyone else currently on board."

"Yes, I'm sure we do have to have someone different. I'm prepared to work as hard as I can to help out," the mayor added, "as are we all, but we don't have the training. Could you do it?"

"No, I have too much on my plate and a newly expanded - more accurately, created - office to whip into shape. They're all great people but we need to create the team. That doesn't leave me much time for outside activities" - she blushed, surprising everyone except George - "just now."

"What about you, George?" the senior councillor inquired. "It's your town and I know you think a lot of it. You've got a lot of administrative experience and a good head. You can keep our people together, and sift out the incompetents. I can't see Bart objecting."

"If I were to do this, and that will only happen if Bart Culderson agrees, you would have to agree to give me a day a week for the store - I owe that to Bart and it'll be my store one day, too, not so very far away. We've got a new project in the works as well. That's mine and I have to be able to have time to make it happen. Second, I am only going to stay in place for six weeks, perhaps eight. You should be able to hire on someone permanent within that period. Third, you take Dee Dee's advice on what we need to do to get out of this hole. All of it."

"We'll have a formal council meeting this evening," the mayor decided. "It will have to be public. I can get a notice out to the radio stations and someone can put it on the website. We'll make the appointment on those conditions. We'll formally relieve the town administrator of his position, of course. Anything else?"

"Signing officers," Dee Dee put in.

"Of course. George and the mayor or deputy mayor. Dee Dee if George is unavailable."

"That's unusual, but then this whole problem is unusual," George commented. "I suggest we adopt an internal policy that says no cheques get signed until Dee Dee or one of her people approve. Nobody signs a blank cheque. Also, we have to have a 'no overtime' policy for the short term until we have a handle on that. It's costing too much. The policy would only apply to non-union staff but our supervisors will limit other overtime to true emergencies if they're not getting paid at the same time. We can sort out who should have been paid for emergencies afterwards. This business of paying salaried employees overtime has to stop."

"We have a meeting with the state people in a few minutes," Dee Dee continued. "I was going to ask George to come along as part of Foster and Foster, but I guess he has another capacity now. Mr. Mayor, I'd like you to attend. As for the rest of the council, I'm sorry. We can report results tonight and I've no doubt the mayor will let you all know privately exactly what happened, but there are things that have to be said that can't be said in front of an audience, even people as committed as you all are."

"We understand," the deputy mayor said. "I want those things to be said, so I'll get out of your way."

The council members left the conference room at Dee Dee's offices.

"Julie, are the state people here yet?"

"Not yet. They were notified for nine and it's not that quite yet."

"George, I'm going to unload on them. This mess is a good part theirs. If we can get some money out of them, well and good, but I am going to make my displeasure known. Are you with me?"

"All the way."

"Mr. Mayor?"

"Yeah. If it was up to me I'd go a little soft, but that's the way I am, and maybe that's part of why we're in this mess."

"Perhaps. There are a lot of reasons that the town has gone downhill on roller skates, not just one or two. Plenty of blame to share out. As I understand the council, though, we're not into blame, we're into curing this mess."

"So we are."

The state people were twenty minutes late, without an excuse. However, they did bring their supervisor. George hadn't figured out yet whether that was good or bad. It didn't seem to concern Dee Dee one way or the other.

"This is Dee Dee Foster, gentlemen," the mayor introduced them. "The forensic auditor. She's got a lot to tell you, none of it good. George Foster, here, is a local merchant and her partner in their consulting arm. I'm Mayor Crosby."

The state people introduced themselves.

"Wilkin Barnes, Director of Advisory Functions, Local Government Branch."

"Harris Hennessey, advisor, Local Government Branch."

"Franklyn Unwin, financial analyst, Local Government Branch."

"Meredith Jones, auditor, State Audit Office."

"Right," the mayor sighed. "I'm going to turn the meeting over to Dee Dee. First, though, I want you to know that as of right after this meeting our administrator will not be working here, so I would appreciate it if you did not consider him as representing the town in any way and did not tell him that he is being relieved until I've had a chance to do so."

"We can't become involved in that," Hennessey spoke up. "We work with these people all the time."

"Don't let that bother you. That decision has been made and will be formalized at the council meeting tonight. You are welcome to stay for that meeting if you choose. However, the real problems are what we asked you to hear today. Dee Dee?"

"I was asked to undertake a forensic audit of the town with, I understand, the state's approval."

"Not really," Hennessey said. "I just agreed that it was needed and that the state would cover whatever wasn't covered by insurance. When your firm was mentioned, I agreed that it would be suitable since it had no tie to the town. The mayor said you had some expertise with fraud and I agreed that was appropriate. I had no idea you are as young as you are. If I had I might have insisted on someone more experienced."

"We were extremely pleased when we heard who'd been selected," the person from the state audit office advised. "Ms. Foster has become one of the stars of the audit field in the short time she's been in practice. Our office is not aware that a better choice could have been made." So there, Dee Dee thought, barely succeeding in restraining a triumphant grin. She glowed at the flash of pride in George's eyes.

Hennessey looked a bit unhappy that his attempt to belittle Dee Dee and minimize the impact of whatever she might report had been so efficiently derailed. He may have been a tad nervous that his superior had not come rushing to his support, either.

"Let me start by telling you that the town is in dire straits, that bankruptcy is just around the corner and that the council has determined to pull back from the edge of the abyss if it is at all possible to do so." Okay, George thought to himself, don't hold back, Dee Dee. Tell them what you really think.

"A lot of it's your fault." Oh, okay then, George continued to himself. Not going to let them down easily, are we?

Hennessey puffed himself up to object furiously, but his superior cut in first.

"Tell us what the situation is. Then you can tell us why you think we're part of the problem. Whether or not we're part of the problem, we need to be part of the solution." Hennessey actually blinked. Might have to work this week, eh, George thought to himself, but he could tell Dee Dee shared his thought, and perhaps the state auditor's person, too. She had a little grin that wasn't too obvious.

"The current situation is that the town has virtually no cash on hand and has exhausted its authorized borrowing limits for operating funds. Cash flow between now and the end of March is likely to be minimal. The town is running a large deficit and the tax rate was set in ignorance of the true state of affairs so there will be an additional deficit. Most of the utility accounts are in arrears and I am fairly sure that a significant part of those arrears, possibly nearly all of them, are illusory. That is, the accounts were paid and in many cases receipts were handed out, but the funds never made it to the town's coffers. The shortfall resulted from employee theft. The mayor suspended the individual, who has since resigned. The police are involved and charges will be laid when the police have a better grip on what was done, possibly when we complete our work.

"Some part of what was stolen may be recoverable through insurance. We have no guarantee, and the coverage has a limit.

"The cash shortage is also due to the failure of the town to claim capital grant instalments in a timely manner, tying up a large part of the town's available funds. We can deal with that. The debt service ratio has gone from three percent to thirty per cent in the last five years, on your watch, Mr. Hennessey. In this state local government capital borrowings are subject to state approval. You have approved this massive shift. No warnings were provided to the town, which I should have thought was a state function. The impact on the tax rate has yet to be felt since that was left out of this year's budget as well. I noted that the amount of the budget allocated to debt charges is exactly the same as it was four years ago, three years ago, two years ago and last year, while the debt has increased by almost ten times. This was either through incompetence or sheer laziness, I'm not sure which, though I think it's both. Again, no one at state remarked on it, and the town's past auditors made no mention of it in such of the statements as they have got around to preparing. There's a problem there, too."

"The town's auditors," the representative from the State Auditor's office asked, "are they Mason and Flinn? Low cost audits for low value results?"

"Yes, and yes," Dee Dee answered.

"The previous mayor thought we were spending too much on audit work," the mayor tried to explain. "After all, they were licensed by the Local Government Branch to do municipal audits, so of course we thought they were competent."

All that elicited was a sidelong glance from the auditor to Barnes, Director of Advisory Functions. Barnes said nothing, but he didn't look comfortable.

"Part of the problem is that the statements for the last but one fiscal year have yet to be filed, though I understand that is imminent. Whether the statements for the past year will be filed in a timely manner is anyone's guess. That is a failure of the audit function and is something that council should have realized was a serious issue and that state officials ought to have commented on."

"I suppose our administrator just kept putting them off," the mayor offered. He was trying to be conciliatory, but Dee Dee couldn't help hitting the ball he'd tossed up.

"Frankly," Dee Dee said, "the auditors ought to have complained to the council, or at least the audit committee. That's part of their job. They work for the council, and indirectly the public, not the administration."

"That is correct," the state auditor tossed out, "straight out of the manual."

"No mention at all," came from the mayor. "We do have a meeting scheduled with the auditors in a week's time to receive the annual statements from the year before. No one knows the status of last year's accounts."

"We'd better have someone here," Barnes said. "Mr. Hennessey, Mr. Unwin, you'll have to clear your calendars. Ms. Jones, if you could attend as well I would greatly appreciate your input."

"It should be possible. I'll confirm with my boss and get back to you."

"Thank you."

Barnes turned to Dee Dee.

"Is that it?"

"Not really. The town also has a lousy computer accounting system, so bad that they were running two at once for a while, sort of. I have no idea why they thought they needed a new system, or why they didn't just junk it when they found out they had to keep the old system running. How many bits of information disappeared when people thought it went into one system but it ended up in the other, or in neither, I can't say.

"I have to add that the theft has been going on for some years, and there is no way it should have been undetected for so long. That is sheer incompetence, at a lot of levels.

"The council is prepared to accept their share of the blame. They didn't exercise a reasonable degree of supervision. The Local Government Branch council training sessions barely mention the requirement, though, so how could they know? They had a lot of help with creating this disaster, and they aren't going to go down alone. They want to save the situation. I intend to see that everyone who contributed to it helps cure it. If that means legal action, so be it."

"You haven't the money for that," Hennessey sneered.

"Think again, Mr. Hennessey," George intervened. "Our solicitor has offered his services free of charge if it means rescuing the town. You have to know his qualifications."

"No point in trading threats, gentlemen," the mayor commented, "there's enough real trouble that we don't have to borrow any. Yet."

"Okay," Barnes summarized, "we have employee theft, in excess of one hundred thousand dollars but likely a great deal more. There is insurance within limits. We have inadequate collection procedures. The town's major asset is tax and utility arrears, collectibles. Our information at present is that at least the utility arrears are in large part ephemeral, worthless. We have atrocious information about the true state of the town's finances, except that the current borrowing limits have been reached and the next debt payments cannot be made out of the funds on hand, resulting in bankruptcy and who knows what further chaos. We also know that the town has an accumulated deficit that has not been included in the tax rate, contrary to law. I don't suppose anyone can be charged since no one knew about it, although they should have, and whose fault that is I don't know. The increased annual debt charges have not been included in the budget. The town's capital borrowing has escalated out of control. The town administration is in a shambles. I suppose we'll find other problems as we go along. Frankly, I don't know when I've encountered such a disaster.

"Mr. Mayor, the obvious solution for you people is to turn up your toes, forget all this, and turn it over to us. We don't want it, I assure you, but it would certainly simplify your lives."

"The council is aware of most of the problems," the mayor said. "We have agreed that we are prepared to do everything we can to save the town. We can't do it alone, we know that, but we think that with a certain amount of help we can do it. I haven't mentioned it to council, only just thought of it this minute, but I'm going to ask council members to forego their honoraria, at least for the rest of the fiscal year, as a token of our commitment."

"You'll need an administrator," Hennessey put in. "Can you appoint anyone from within, even on a temporary basis? If not, I can check around . . . ."

"No need," the mayor cut him off, "we can't appoint from within, but George, here, has agreed to hold the fort for us for six weeks, perhaps a little longer. We'll need your help in finding someone who is prepared to work with us for the long term."

"Okay, you want to try to get out of this mess and you need help," Barnes went on. "Your problems have accumulated and there are a number of causes, all of them dependent on the others. Some of those causes are our actions, or inactions, I will admit, here, though not publicly. Your advice from us has not been directed to council. Part of that is our internal policy of not going around the administrator, even when we need to, and we'll have to look into changing that. After all, the administrator is not the elected government of the town. We've let you borrow far too heavily. That's your fault for doing it and our fault for letting you.