"Text Book Study" in Failure to Provide Oversight

For Immediate Release                                                                                   Chris Pappas   February 5, 2008                                                                                          (603) 867-8438

"Text Book Study" in Failure to Provide Oversight
Audit Finds Former City Grants Coordinator Who Allegedly Stole $23,000 From The City Was "Unsupervised"; Mayoral Aide Authorized Payment Over Objections From Other City Officials

(Manchester, NH) - An aide in Mayor Frank Guinta's office overrode the objections of two city finance officials, according to the Internal Audit Report released yesterday.  The audit called the lack of oversight by the Mayor's Office "a text book study of how a complete breakdown in internal control structure can lead to fraudulent activity within the City of Manchester government." Page 1 of Internal Audit Report. "...The Grants Manager would provide inadequate documentation when seeking reimbursement. The accounts payable person in the Finance Department rejected some payments due to the lack of documentation or questionable documentation. Initially, she was over ridden by the acting Finance Office and processed the claim. After the first couple of times, the acting Finance Officer refused to put them through and the reimbursement was allowed by the Office of the Mayor. In all of the cases where this happened the invoices were forged." -Page 9 of Internal Audit ReportManchester Alderman Mark Roy commented in today's Union Leader, "It seems like a lot of our internal safeguards were working but over-ridden. That, to me, is as concerning as the fraud itself."- Union Leader, Mayoral aide, finance director OK'd expenses, Tuesday, Feb 5, 2008. 
The report states the grants coordinator, who was attached to the Mayor's Office, operated in "a control structure where he was given ample opportunity to commit fraud." Page 9.
The Auditor summed up Mayor Guinta's failed leadership by reporting that: "Top management in the City occasionally chooses to ignore policies or procedures when they become inconvenient." Page 9 So far, Mayor Guinta has failed to give the people a reason for this lack of oversight. Instead, in a letter to the auditor, Mayor Guinta "disagrees" with the audit finding that the grants coordinator was in fact attached to the Mayor's Office and a mayoral aide did sign off on reimbursement checks. "Although the Board of Alderman did administratively assign the VISTA grant to the Office of the Mayor, it did not assign Mr. Hebert, the VISTA program itself, or any of the functions of the VISTA program," Guinta wrote.