IVGID’s award for alleged financial transparency; not! (Opinion)
Incline Village General Improvement District staff have hired a public affairs firm (Tri-Strategies), at a cost of $4,000/month, to issue a press release wherein interim GM Indra Winquest touts IVGID’s receipt of a Certificate of Achievement for Excellence in Financial Reporting issued by the Government Finance Officers Association (GFOA) insofar as its 2017 Comprehensive Annual Financial Report (CAFR) is concerned.
According to Winquest, receipt of the certificate demonstrates IVGID’s “commitment to ensuring the highest integrity in financial reporting, transparency and accountability.”
Without any fact checking, the Tahoe Daily Tribune republished these representations in its Aug. 24 edition. I take offense.
The GFOA is nothing more than a professional trade group “open to everyone whose career, studies or interests involve government financial management,” according to its website.
Among other things, it “offers public-sector finance professionals an unparalleled opportunity to” … “achieve professional recognition.”
Insofar as GFOA Certificates of Achievement awards in particular are concerned, last year a whopping 4,328 such awards were meted out!
To become an award recipient one must make formal application, submit an audited CAFR, and most importantly, pay a fee ($1,420 for an entity the size of IVGID).
But since certificates are awarded for CAFRs in “compliance with… generally accepted accounting principles (GAAP),” and Nevada law mandates that all governmental CAFRs adhere to GAAP, essentially every Nevada governmental entity’s CAFR qualifies for a Certificate of Achievement.
Why then the need for a certificate? Because when IVGID is awarded a certificate, its finance director who submits the application (Gerry Eick) receives his own personal “Award of Financial Reporting Achievement.” Thus rather than the highest form of recognition in governmental accounting and financial reporting, the certificates are nothing more than the product of paying a fee, purchasing a certificate, and using the “award” as a propaganda tool to promote oneself and make the public think IVGID is “transparent.”
It is for these very reasons the Orange County Register Newspaper reports that a number of former award winners “have decided the budget awards are no longer worth the cost.” But for 19 straight years, not IVGID!
According to the GFOA, “the goal of the program is not to assess the financial health of participating governments (as IVGID represents), but rather to ensure that users of their financial statements have the information they need to do so themselves.”
This explains why infamous award recipients like the City of Bell, California, the City of Stockton, California (where former GM Pinkerton was Redevelopment Director shortly before Stockton filed bankruptcy because of redevelopment irregularities), and the City of North Las Vegas (currently under Department of Taxation “watch” for its financial practices) were all able to secure certificates.
Nor does the award measure “transparency.” Although IVGID’s CAFR compares actual to budgeted expenditures, a line item examination will reveal tens if not hundreds of thousands of dollars of expenditures never appropriated by the Board (GAAP noncompliance). For instance, the board has never budgeted for third party (Tri-Strategies) public relations services. Nor has it budgeted for a wastewater storage pond liner (never actually been constructed, yet reported financially as a completed expenditure). Nor were servicing costs on non-existent 2013-14 bonds incurred as actually reported in IVGID’s 2013-15 CAFRs.
And although IVGID is one of at least 89 general improvement districts (“GIDs”) in the state, it is the only one which has chosen to pay for this “prestigious award.” Does anyone really believe IVGID is the only GID whose CAFR warrants certification?
IVGID’s CAFR may contain some helpful information. But the annual (especially operating) budget is an area where IVGID sorely lacks transparency. When our trustees are unable to view proposed expenditures, notwithstanding the fact the majority promised adoption of a detailed zero-based budget when they were candidates, how can anyone seriously assert “transparency”?
Given our community consists of many citizens with extensive knowledge in financial reporting, shouldn’t they be the ones to evaluate “the integrity (of IVGID’s) financial reporting, accountability and transparency” rather than IVGID senior staff with an agenda and their public relations collaborators?
Finally, understand that the costs of this “award” (hours of unreimbursed staff time, as well as Tri-Strategies’ fees) were paid for with our Rec Fee even though they have zero to do with making our recreational facilities “available” to we who are compelled to pay. So much for “transparency,” and now you know where your Rec Fee really goes.