Scott Mann's Statement on Overbilling

Below is a statement of Councilman Scott Mann regarding the recent issue on the City of Menifee having been overbilled for certain services....

STATEMENT – Scott A. Mann, Councilman and Chair, Finance Committee, City of Menifee, Menifee – March 18, 2010

The Menifee City Council agreed that there would be no comment from its members during the course of the audit and that statements would come from the Mayor or City Manager. As a result, I had the Mayor review this prior to its release and he had no objection. The purpose of my statement is to confirm for the citizens of Menifee that the Council is proceeding in an appropriate manner based upon its recent 5-0 vote to go forward with another audit. The audit, and some of the issues it addresses, has been the subject of on-going press coverage. The public needs to know that this is a real audit for real reasons and not a political vendetta as some would charge.

First, an explanation of why this job fell to me. My background includes service as an investigator for the Judge Advocate General, presiding over Summary Court-Martials (which are one officer trials) and conducting administrative review hearings for non-judicial proceedings. I hold a certification in public finance from USC and I also have a Master of Business Administration degree and a Bachelor of Business Administration degree. Based upon these experiences, my colleagues felt I was in the best position to lead this performance review based upon an assumption of decreasing revenues from the State.

Second, an explanation of what led to the vote on the professional services agreement: the Finance Committee began reviewing invoices and the warrant register in December 2009, at its own request. Up until that time, we had relied on staff to follow appropriate internal controls in accordance with Generally Accepted Accounting Principles (GAAP). Unfortunately, what began as a performance audit of contracts for a new city broadened rapidly when the Finance Committee discovered that the City had paid Winzler & Kelly almost $2 million dollars without any apparent review or segregated oversight of those expenses. As a fiduciary for the city taxpayer, as evidence surfaces that a prudent person would view as possible serious ethical concerns or even potential legal violations; it becomes incumbent upon us to allow facts to lead us to our conclusions, not personalities nor politics.

We discovered irregularities in the PV Maintenance billing as reported in the press. The total amount of the PV Maintenance billing will exceed $1 million dollars. However, when combined, the Winzler & Kelly and the PV Maintenance expenditures exceed $3 million dollars. This dollar figure represents nearly 15% of the City of Menifee’s entire budget. We have identified potential irregularities in the payments of other contracts but, it would not be fair to list those firms in this statement while the examination of those contracts is on-going (let me confirm that this does not include the City Attorney’s contract). Without placing any blame, the prudent man rule mandates that we look at these expenditures more thoroughly in light of an obvious lack of internal financial controls.

Based on our Council’s commitment to work as a team, our unanimous vote to proceed and the very seriousness of the problem, our Council decided to move expeditiously and let professional, qualified, independent sets of eyes look at our books. Unfortunately, a member of the Council, Ms. Kuenzi, has decided to not honor her vote as evidenced by her three personal attempts this week to interfere with this audit. While I fail to understand how this will protect taxpayers by doing so without having complete knowledge of what has occurred, I felt it necessary to issue a statement today to clear the record and reiterate that this process was begun on unanimous vote of the Council. Looking at the evidence available to us, it is clear we have serious unanswered questions related to the day-to-day operations of the city and we will continue to search out the truth and communicate that to taxpayers.

While I am not authorized to speak for my colleagues, I am quite certain that none of us approved the broad scope of this secondary external independent audit for “political” reasons. We approved it because the citizens of Menifee expect us to do our jobs and do them well. They also expect us to conduct ourselves properly and uphold the highest ethical standards in the performance of those duties.

- Scott A. Mann, Councilman and Chair, Finance Committee, City of Menifee, March 18,
2010