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FEB 03 - FEB 10, 2015

Lockport and Niagara Falls Take Different Paths to Monitor Fiscal Problems

By Anna M. Howard

February 03, 2015

Lockport recently selected three of its residents to sit on the newly created "Lockport Audit Committee."

The three business leaders are: Paul Mullane, David S. Sholk and Brian C. Ranney, all Lockport residents.

On January 20 the Niagara Falls council approved, 4-1, a resolution sponsored by chairman Andrew Touma titled, Relative to the Creation of a city of Niagara Falls Financial Advisory Panel. The council is presently accepting resumes from city residents interested in serving on the panel.

There are major differences between the two cities and their respective financial review/oversight efforts: First, the Lockport committee is being formed through the mayor's office with council input. The Niagara Falls panel is being formed through the city council. Second, Lockport is creating their committee at the direction of the State Comptroller while Niagara Falls is doing it voluntarily.

The council recently declined the assistance of the state financial restructuring board, although Mayor Dyster encouraged the council to accept that state proposal.

Because Lockport's financial problems, including a near $5 million deficit, caused the city to borrow $4.3 million from the state the city is now beholding to Albany, having to share all fiscal information with the State Comptroller for the next decade. The seating of the Lockport Audit Committee is fallout from the state loan and the city's lack of financial oversight in the past.

Lockport Mayor Anne E. McCaffrey recently told the Buffalo News, "The goal is to have greater scrutiny of the audit process…the goal is to prevent the city from getting into financial trouble again."

The Lockport panel will oversee the bid and hire of Lockport's outside auditing firm, and "The city employees or their immediate family are barred from serving on the audit committee. Members aren't allowed to have business with the city.

The Lockport Audit Committee has been designed not to simply rubber stamp city finance records. They're going to have significant power in the auditing process.

The Lockport Audit Committee goes one significant step further than the Niagara Falls council finance panel in that "The committee will have the power to investigate any suspected fraud and turn its findings over to outside agencies."

Lockport is also going to hire a city finance director in spite of the fact that they already have a city treasurer handling financial matters.

The Niagara Falls council "Financial Review Panel" resolution lacks the gravity and precision that Lockport's "Audit Committee" possesses.

The Niagara Falls panel will have as many as seven members. The members will report to the council, not the State Comptroller, and "The panel will have no formal decision making role, and will have no access to confidential supervisory or other confidential information regarding specific City financial matters" according to the resolution.

That it will not have access to information that details the heart of the city's financial condition, and have no authority to make referrals to outside agencies if irregularities are discovered as the Lockport committee has, means it is much different panel.

The Niagara Falls council would be wise to guarantee that those chosen are financial professionals with zero connection to city government, and rewrite the resolution to provide the panel with total access to all finance records while empowering the members with investigatory powers.

Otherwise, it remains unclear what its true purpose is. Other than a feel good measure, it will be essentially useless since it can be barred from learning about so -called confidential financial matters (one has to wonder how public monies are confidential) and for that matter toothless since it has no investigatory powers.

It is a far different board than Lockport has established.





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