Manistique's Budget
and Accounting Woes


As a member of the public, active in Manistique city politics since the early 90s, I have viewed much of the City Council's budgets and accounting procedures with suspicion and disbelief. I never found sufficient council, administration, or public support, to make significant changes. Most folk had little active interest, beyond their personal interest, in the particular political elements of specific budget line items, purchases, services, etc.

The consequences, in 1989, of a similar narrow and personal view of the budget, and the accounting procedures that spawned those consequences, was an insolvent City of Manistique close to bankruptcy. The new City Manager inherited the consequences of elected officials without the mental tools or the will to recognize and change the various public policies, officials and employees that were destroying the city.

How bad was it?

Bad enough that the City Manager, in 1989, went to the local paper mill to request financial help to meet City payroll. In other words, the City did not have the money to pay its employees.

What happened to the tax revenues for the many years that those revenues were collected while the City was being screwed into virtual bankruptcy? I don't know.

What I do know is that the tax revenues were not paying for major city infrastructure maintenance, repairs and expansion, and a number of well known folk were making political points.

I do know that, from the early 90's when I first became involved in local politics, there has been an intermittent but gradual shift from elected officials more interested in self serving goals, to elected officials with a greater interest in goals that enhance the community, in general. Unfortunately, that shift has not always included prerequisite intellectual skills to discharge the attendant responsibilities of the elected offices.

At the Manistique City Council meeting of 07/09/01, it became painfully obvious, to a vocal majority of the members, that past accounting procedures were a disaster for much of the recent decade, if not much longer. It was admitted to the public that various levels of ignorance, incompetence and shady to criminal activity managed to thrive well in the shelter of the City's accounting system. That accounting system required several layers of interpretation for the average council member to understand and accept most budget line entries.

I know. As a member of the general public, and as a city councilman, I was never happy with my lack of understanding of the city budget document, as written, or the "secret" knowledge required to interpret its content. As a relatively bright individual, with a technical background that includes the use of math, logic and accounting principles, I always felt that the Manistique City budget was contrived and could not be read and believed, as written. It appeared, too often, that background information from the treasurer, city manager or a department head was required to achieve little more than a vague understanding of the budget data.

Every year, representatives of the City's independent auditors recommended, in the yearly audit reports, that the City should clean up its accounting procedures. It was recommended that the City should create more specific accounts and accounting methods, and delegate different accounting responsibilities to different employees, to reduce the potential for criminal activity and to have more detailed accounting. Little to nothing was done, except to plead that the city could not afford additional help to accommodate the auditors' suggestions.

Last Monday's council recognition of Manistique's accounting mess was significant for several reasons.

1. The council meeting gave the entire Manistique City Council a number of reasons to overhaul or replace the City's accounting system.

It has been stated to me, over some 10 years, that substantial, real improvements in the current system are being made. When I, or any other person with less than a masters degree in criminal psychology and accounting, can read the city budget and understand it, with a little guidance and without three layers of interpretation on hand, I will believe the claims of improvement.

2. The council meeting gave council members, the city manager, and department heads the opportunity to assign Linda Armock, the recently convicted embezzling Manistique City treasurer, as the official scapegoat for the current mess. She was the stated cause of budget discrepancies discussed concerning the ambulance fund of Manistique Public Safety and the streets budget of the Manistique DPW.

There is no doubt that Linda used her position as City Treasurer to embezzle funds. There is little doubt, in my mind, that her awareness of the shoddy manner in which accounting was implemented to meet the City's "needs" was an invitation to more of the same to meet her own perceived needs. I have no reason to believe that she is the cause of all that ails. I would bet, with the likely odds of "winning" much better than at the local casino, that she could recount stories of official creative accounting, over the years, that cover up various department errors or deceit, the costs of which might make her embezzlement relatively insignificant.

I suspect that much could be gained by granting Linda immunity from future prosecution. By paying her for "The Accounting Memoirs", with names and places changed to protect the guilty, actual accounting weaknesses, from department level, up, could be identified and eliminated. Few are concerned about the probability that retirement and a bright political future await those that have, in a different manner, cost the local residents far more than Linda's crime. Maybe someone could write a novel to explore some of the limitless possibilities.

The fact that any, all, or none of the above occurred on Linda Armock's watch does not relieve any council members, past and present, of the responsibility for city policy. If that policy was to accept inscrutable budgets and shoddy accounting procedures, a number of significant causes for the current recognized mess lie not at the feet of Linda Armock, but at the feet of past and present council members, the city manager and department heads.

3. The council meeting provided reasons to terminate the futile attempts to reconcile the books for the past years of varying degrees of benign neglect, ignorance, negligence and misconduct.

In response to various questions from council members, the current City Treasurer admitted that she had no particular reason to believe that reconciling the books was achievable due to a host of reasons that were laid at Linda Armock's feet.

I was assured, last Winter, by an employee of the City's independent auditing firm, that any other past major consequence of embezzlement, within the audited period, would be exposed by the audit. That audit was completed with no such discovery.

I have no reason to believe, like the current City Treasurer, that the books can be reconciled for the past years. Many reasons were given, during the course of council members' discussion, why such a reconciliation would be more a work of fiction than reality. If the laws of the State of Michigan do not require the fiction, then I see no reason to waste the time and money to "cook the books" for posterity. Far better that the current accounting problems are solved and a sound and "user friendly" budgeting and accounting system be developed.

It is possible that an opportunity exists, now that the air is cleared, to institute a City accounting system with functioning procedures and responsibilities that better serve the needs of the general public and the Manistique City Council.

Say ya to responsible accounting, eh?

 © 2001-2003