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County plan demonstrates flaws in system MARK GUYDISH OPINION

At 234 pages, the new “Luzerne County five year plan” is as enlightening as it is long. Seriously.

While much of the content has been reported to some extent over the years, the document gives a clear review of flaws and attempted fixes in county management that have led to our absurd debt problem, with a projected deficit of $30 million next year. If you wanted to sum up the failures that brought us to where we are in two words, I would suggest: Shortsighted and unfocused.

Shortsighted because, as has been well-reported, problems kept being put off till tomorrow. County-wide property reassessment took 40 years, sorely skewing the tax system. Generous terms were built into county employee contracts, creating costs that are now unsustainable. And when it became glaringly obvious that previous practices had led to unmanageable costs, the county masked the problem by annually borrowing new money or restructuring old debts to avoid tax hikes today by increasing costs tomorrow.

It’s important for county bashers to pay attention to the many sections that cite successful streamlining, modernizing and cost-saving measures taken since 2004. But those successes get rapidly outpaced by recurring accounts of failure to coordinate operations and a lack of oversight in critical areas.

Take my favorite, and most unsettling, example: “Cash management.” Here’s a passage that, though a tad dense, says it all:

“The spread of cash management duties throughout county government grows exponentially once the view is expanded to the 68 accounts beyond the General Fund plus additional ‘proprietary accounts’ established and managed by separately elected row officers. While some decentralization of cash management duties is inevitable, the degree to which accounts and responsibility for managing them are spread across county government makes it very difficult to monitor and manage precious cash resources on a countywide basis.”

No policy on opening bank accounts

The people preparing the report couldn’t even determine with certainty how many bank accounts county government has. Why? “Row officers have discretion to open and maintain their own banking accounts and it is not clear whether a list maintained by the Treasurer’s Office is comprehensive.”

Keep reading:

“… There is no formal policy governing when accounts may be opened, under what terms and for what activities. … Without knowing how these separate accounts are used, it is impossible to know to what extent row officers should maintain their own cash flow budget. … Ideally the county would consolidate its account balances where permissible to maximize its leverage in getting the best banking arrangements possible …”

The report notes that the Controller’s office is supposed to conduct audits of all departments, which might at least shed light on how this labyrinthine, deeply decentralized system of spending taxpayer money is actually working, but the Controller’s office is years behind in doing those audits.

Here’s my favorite passage regarding the management of county money:

“Finally, decentralization creates business processes in which multiple people have access to cash, increasing the risk of inappropriate behavior.”

In other words, if you can’t clearly account for every penny flowing in and out of county coffers, odds are someone will use that lack of transparency for their own ill-gotten gain.

Who’d have thought?

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