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When Todd Wolf became City Administrator for the City of Sheboygan last July, he put his business acumen to work. With a Masters of Science in Technology Management and experience in the private sector, he looked at the City as a business and began reviewing processes and procedures, and told his city team members that “If you see something, say something.” And what he discovered was a set of big, big problems. Those problems were detailed in a report from the consultant firm CliftonLarsonAllen LLP, which told the city that it found “gross negligence with regard to the design and execution of process and controls over financial reporting” concerning the value of donated sick leave time and good attendance credits within the Police and Fire Departments. Wolf said that he asked CLA to step in as a third-party to closely examine what was going on. As he put it, “Every business has its shadows”, and he wanted those issues brought clearly forward for all to see.
The first hints that something wasn’t right arose this past January, when Wolf said that “The Fire Department came forward and said: ‘You know, we used this much time out of the pool…’ and our H.R. Director and I looked at each other and said ‘What pool? What are we talking about?’ And that’s when we uncovered that, ‘Hey, this is a problem because it’s not in the (liability report).’”
The “Pool” is an accumulation of sick leave time and performance credits that began in the 1960s and continued into 1985. Wolf said that back when those policies were developed, municipalities – like companies – developed many policies on a handshake, or “this is how we do our process”, and things were not really defined “black and white”, so there’s a lot of gray. Wolf said that this continued as a deeply-entrenched “status quo” in which things were done the same way for a long, long time, and never audited or updated. And because the pools were based upon hours accumulated over several decades during which pay scales changed, and with no ongoing audits, it was impossible to determine a current dollar value. Estimates put the value of the Fire Department’s pre-1985 pool of donated sick leave at $1.2 million.
When asked if any responsible party could be identified, Wolf said “No”, and that it was an accumulation of many things that were “decades in the making”. Wolf said that there were issues where team members had taken responsibility for things because of lack of past management, and so they assumed duties that were not part of their responsibility. And because there was no oversight, some policies and procedures were not done to the highest level. Those problems are now being addressed, but many issues that resulted because of them will have implications going forward.
Some of those issues, implications, and solutions, will be addressed in the next story in this series.
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