ENP STAFF REPORTS
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Lockport Treasurer Mike White offered an official statement to the press in reaction to the state audit that was released this morning.

White's statement follows in its entirety:

The following is my response as the chief financial officer of the city to the Report of Examination released by the Office of the State Comptroller today for the period 1-1-14 to 5-30-14.

First and foremost, the buck stops on my desk and I accept full responsibility for the operations of my office and staff over the past several years.

Second, this report is the result of full and complete cooperation by me and my office with the Office of the State Comptroller for the past several years. We have nothing to hide and some of the critical comments contained within that report confirm that. In fact, we welcome the advice and guidance that was provided in that report. It only confirms what I have been trying to accomplish for the past several years.

Thirdly, the City of Lockport is not alone and is one of several cities across the state and country for that matter facing financial distress.

The severity of the financial stress the city now faces did not come about overnight. It was the culmination of many problems that has existed within our city government for several years.

However, since our last audit report the new mayor, Common Council and I have taken several initiatives to improve our financial management.

At the beginning of 2014, the Common Council, led by our current mayor, hired an independent consultant to assess the underlying causes to the problems that were addressed in the comptroller's initial findings. The independent consultant also assessed the historical and current structure of the treasurer's office.

Some of the key points of the independent consultant's report determined that a lack of communication between and among the various departments was a pervasive problem. In many instances, the treasurer's office was not adequately informed about matters that impacted city finances. This is no longer an issue.

The consultant's report also noted "that there was a noticeable conflict between the former mayor and the treasurer's office." The consultant's report also "described the former mayor as acting in a very totalitarian way throughout the city." In fact, the consultant indicated that they believe the former mayor may have "set the treasurer's office up to fail." This was supported by the fact that certain departments were off limit to review and audit by the treasurer's office. This is also no longer the case.

There were staffing issues in the past. The position of staff accountant was vacated several years ago and never replaced, which led to duties falling to others by default to assume without sufficient training and experience. We were without a full-time auditor from 2007 to 2009, which marked the beginning of our struggles in the treasurer's office.

For the year 2013 and prior, the budget was controlled by a few key people in the city — primarily the former mayor and budget director. The independent consultant that was recently retained by the city confirmed that the budgets 2013, included revenues that were over-estimated for the sole purpose of keeping the tax levy flat and to justify the level of expenditures desired. The 2013 budget was passed with the assurance by the former mayor that he would obtain major concessions from the unions with respect to health care and layoffs. Neither of those occurred until our present mayor addressed them head on. Therefore, the current financial crisis we are in should (be) no surprise to anyone.

With respect to the monthly financials, my office has always provided them to the council and mayor. If you go back and look at previous year's budgets, you will find that the last year the fund balance was appropriated to attempt to balance the budget was 2010. Thus it was known that there was no fund balance available at that time.

We have always monitored our cash flow, just not in the format the comptroller's office wanted. We are now doing that.

In light of all the above, I have come to the conclusion that the job of the treasurer's office has changed over the years with the advancement of technology that requires complicated computer software, stricter reporting requirements in different formats, tighter timelines for preparing and filing fiscal reports. We have discussed the possibility of removing the office of the treasurer from the Charter as an elected position, restructuring my role and implement a position that requires a full-time accountant with a CPA degree or Accounting degree in public finance. In the coming weeks, the mayor will be able to share more information after our legal department has had a chance to research the same.

In closing, communication in the administration has moved light years ahead and we are implementing a comprehensive plan to move this City forward in conjunction with the state comptroller's office.

My office is always open and has always been open to anyone that would like to discuss these matters further in detail.

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