City Audit Report

[BankruptcyGuy]

If you can, download the report and read it. Some of it is hard to slog through, but you can find a bunch of interesting nuggets:

1. Fraud in unemployment claims.
2. Annuity funding that shouldn't have been paid.
3. $73MM in real estate or equity investment losses.
4. Overinvestment in real estate [[big failing of the pension board).
5. 11 heathcare carriers for a payroll of less than 10,000 [[absurd).
6. The cherry on top is this one: they have a health care provider, the most expensive one at that, that the auditors can't even confirm is a validly formed company in Michigan or otherwise.

http://www.detroitnews.com/article/2...text|FRONTPAGE

[JBMcB]

Not to ask too dumb of a question, but why wasn't an audit like this done a long time ago? Hell, why isn't it done every couple of years?

We audit everything at our company every year, and we aren't throwing around hundreds of millions of dollars in retiree's money.

[ndavies]

This happens when the people who can request the audit are the ones most likely to be found raiding the cookie jar. Why would they request an audit when they know it would find huge problems. Unfortunately, I think this is a case of the people voting for the board not understanding the ramifications of their votes. [[or maybe they do and don't want to loose out on the gold plated cookies the influence peddlers are handing them.)

[Honky Tonk]

Not to ask too dumb of a question, but why wasn't an audit like this done a long time ago? Hell, why isn't it done every couple of years?

We audit everything at our company every year, and we aren't throwing around hundreds of millions of dollars in retiree's money.

I KNOW, I IKNOW, incompetence?

[Detroitnerd]

I KNOW, I IKNOW, incompetence?

Incompetence, corruption, criminal misuse of the public trust, sure -- all of that.

But isn't the underlying cause the way we've organized the metro, with a poor city surrounded by defensive cantons, all vying for a dwindling share of have-somes and have-mores?

[ndavies]

The incompetence is the underlying issue. It's the incompetence of elected officials that drove the people who had choices out of the city. It left only the people who had no other choice. It's the continual addition of rules, regulations and taxes that drove businesses away. It's the continuation of crappy schools, terrible crime and insanely high tax rates that are continuing to drive the middle class out of the city. People don't have to live in a broken place and have voted with there feet.

[JBMcB]

But isn't the underlying cause the way we've organized the metro, with a poor city surrounded by defensive cantons, all vying for a dwindling share of have-somes and have-mores?

I don't think so - even relatively successful cities and metro regions have pensions that are pretty screwed up.

It seems to me to be a general attitude of those in government that what they do doesn't really matter. There will always be a bailout, there will always be more money, there will always be assistance of some kind.

Why audit anything? Why adhere to generally accepted accounting principals? Why follow any sort of best practices when handling money? That's just more work, and politically dangerous if anything bad turns up. If anything goes wrong, they'll just get some more money from somewhere.

It's the public version of the too big to fail mentality.

[Wesley Mouch]

Incompetence, corruption, criminal misuse of the public trust, sure -- all of that.

But isn't the underlying cause the way we've organized the metro, with a poor city surrounded by defensive cantons, all vying for a dwindling share of have-somes and have-mores?

I'm with you on regionalization, but I don't think anyone 'organized' anything. Nobody shipped people in rail cars to a ghetto or work camp. It was all voluntary.

The citizens made a collective decision to change the priorities of the city -- combined with some court ordered remedies to imagined problems such as segregation of schools [[where there no doubt was a problem -- but can anyone imagine that cross-district bussing is a wise solution?)

The citizens voices were heard -- and we see the result. Still, when a leader like Snyder tries to work on schools he's met with a chorus of 'stay away -- we'll solve this ourselves with the same methods we're been using'.

Nobody imposed the chaos. Wasn't 'organized'. It was the natural result of the actions of citizens. Now how do we change the structure to get better results? Sure -- regionalization should play a large part.

[jaytheory]

[QUOTE=Wesley Mouch;404276]I'm with you on regionalization, but I don't think anyone 'organized' anything. Nobody shipped people in rail cars to a ghetto or work camp. It was all voluntary.]

Voluntary sure, market driven by external factors and internal factored that coerced certain things to happen and certain actors to act a certain way definitely.

[Detroitnerd]

Whether it's de jure or de facto, collectively, we have established one of the most income-segregated metropolitan regions in the world. I can understand why some people on this board would back way up and say, "We? We didn't choose to be so racially and income stratified! That wasn't conscious!" But that's the way it is, so, whether it was one overarching plan or the result of millions of individual decisions, that's what happened.

And the end result, I believe, is the underlying cause of having a slum city. Then why should we act all surprised when a slum city is run by crooked politicians? The majority of those of us with the means to do so looked away for years and figured, "It's their problem now; let them deal with it." So why then all this shock about a slum being poorly managed?

[Wesley Mouch]

Whether it's de jure or de facto, collectively, we have established one of the most income-segregated metropolitan regions in the world. I can understand why some people on this board would back way up and say, "We? We didn't choose to be so racially and income stratified! That wasn't conscious!" But that's the way it is, so, whether it was one overarching plan or the result of millions of individual decisions, that's what happened.

And the end result, I believe, is the underlying cause of having a slum city. Then why should we act all surprised when a slum city is run by crooked politicians? The majority of those of us with the means to do so looked away for years and figured, "It's their problem now; let them deal with it." So why then all this shock about a slum being poorly managed?

Who's shocked? Certainly not me.

You're right. De jure or de factor matters not. Detroit certainly is stratified. But that's the cause? I think that's the result. Maybe that's the big difference between us.

[Detroitnerd]

I hope I can help us all think outside the box. While it's important to look Detroit's problem's squarely in the face, they don't exist in a vacuum.

There are those who will triumphantly point to this report with a smirk and laughter about how "they" can't run "their" city and attempt to make political hay out of it. I hope this audit provokes something more thoughtful than that!

[corktownyuppie]

And the end result, I believe, is the underlying cause of having a slum city. Then why should we act all surprised when a slum city is run by crooked politicians? The majority of those of us with the means to do so looked away for years and figured, "It's their problem now; let them deal with it."

I'm with you but only up until the above.

A slum city doesn't need to be run by crooked politicians. The citizenry -- and nowhere else do we have a culture that better knows the power of the people to speak truth to the authority than Detroit -- has had and still has every opportunity to rebel against the corruption, and most importantly, the CULTURE of corruption that pervades this city.

So why then all this shock about a slum being poorly managed?

There's a difference between poor management and corrupt management. The poor and mediocre managers make mistakes and exercise poor judgment in allocating resources or holding people accountable.

Corrupt management sees public resources as a trough which exists to better themselves at the expense of the whole.

Despite being a capitalist, I still have a lean toward social justice -- and sometimes forms of socialism to get us there --as does the history of the middle class in Detroit.

Nowhere in social justice does it become ok for fraudulent and corrupt leaders to better themselves at the expense of the poor, huddled masses, and they need to be held accountable.

[Detroitnerd]

I see the corruption as a serious problem, and I don't see what I've posted that excuses it or apologizes for it.

But I think we should understand that the way the region is arranged all but ensures that there will be a certain level of corruption in some areas.

Let's say you have two condo towers. Through various policies, bylaws, personal preferences and natural disasters, the one tower falls into disrepair and fills up almost exclusively with low-income people. The other tower, however, fills up with people of means.

Wouldn't you naturally expect that the people with higher incomes are more engaged in the running of their tower?

And wouldn't you expect that the poorer people, living paycheck to paycheck, often single parents, less likely to be literate or well-educated, are less likely to look into the books and demand excellence? After all, the poor people don't have a whole lot of choice in where they live, do they? And don't criminals select the path of least resistance?

This is not to excuse or apologize for anything, but I think it does help explain things. There's a segment of people in metro Detroit who've been content to live in an area that's fairly well-off, so long as they don't have to live among people who are poorer and less civically engaged; the natural flip side of that is a crook's paradise. And that's our regional shame, certainly nothing to make political hay out of.

[Wesley Mouch]

...Wouldn't you naturally expect that the people with higher incomes are more engaged in the running of their tower? ......

No. Quite the opposite.

[JBMcB]

Wouldn't you naturally expect that the people with higher incomes are more engaged in the running of their tower?

No, I don't see why the two factors would necessarily be correlated. You could also say that, since housing eats up a larger percentage of their income, poor people would be *more* involved with their tower, since they have more vested.

Of course, we aren't necessarily dealing with logic here.

[Hermod]

Wouldn't you naturally expect that the people with higher incomes are more engaged in the running of their tower?

You have two churches, one with very wealthy members and one with poor members. The rich church hires contractors to fix things and landscapers to cut the grass and trim the bushes. For the poor church, the members come in on Saturday and cut the grass with their own mowers. They organize a church picnic at which the men of the church to take a day and paint the church.

[Hermod]

Incompetence, corruption, criminal misuse of the public trust, sure -- all of that.

But isn't the underlying cause the way we've organized the metro, with a poor city surrounded by defensive cantons, all vying for a dwindling share of have-somes and have-mores?

The metro was orgaqnized that way when you had an extremely rich city surrounded by poor truck farms and slightly less poor dairy farms.