Auditor’s report on EDC numbers tells many tales

By Sean Paige

Critics may contend that the less-than-scandalous findings of the first-ever “performance audit” of the Economic Development Corp. mean it was a waste of time and money, which unnecessarily called the group’s reputation into question.

As someone who helped put the process in motion — and who reads much more into the report than what’s on the page — I beg to differ.

Exercising true government oversight isn’t necessarily a game of “gotcha.” It’s something responsible governments do as a matter of course, to ensure that public resources are being used properly and cost-effectively, irrespective of whether any dark suspicions have been aroused. It keeps the recipients of public funds on their toes, and honest, because they know they’re being watched. If it makes them a little worried, if it makes then squirm, I’m alright with that. That’s the point.

I called for the audit not because I suspected improprieties at EDC (though I did have a hunch they were engaged in job creation inflation), but because the EDC is a recipient of significant public funds, because it hadn’t ever before undergone an independent, performance-type audit and because I believed City Hall had to take tangible steps to rebuild public trust. The anger that greeted this request indicates how alien the concept of real oversight is in Colorado Springs.

It also demonstrated the sense of entitlement that was pervasive inside EDC, and among EDC supporters, who somehow had come to feel they were entitled for continuous public support, no questions asked, and that we should simply take their word for what they were doing with our money.

I was bothered by these attitudes and decided to do something about it. And I think some important lessons have been learned through the process.

The auditor found that EDC was inflating job creation estimates by 11 percent, a “mistake” EDC blames, rather lamely, on a contractor. That’s not scandalous, but it’s significant. I don’t support any further public funding for EDC, but if it’s to receive more, I think it should volunteer to take an 11 percent funding cut as a penalty for its sloppiness.

Such “mistakes” are naturally harder to catch when they shine a more positive light on the organization’s performance. The contractor’s work would have received much more scrutiny, I’m sure, if the job creation estimates came in lower than EDC wanted. I’m sure EDC will take more care with facts and figures in the future. That’s the point of these activities.

But the report has tales to tell beyond what appears on the page. It tells me the auditor’s heart wasn’t in this effort, that this was a wimpy whitewash job, and that Colorado Springs has a long way to go in terms of exercising the kind of oversight that will rebuild trust in City Hall.

As a former government-beat journalist in Washington, and former employee of the watchdog group Citizens Against Government Waste, I’ve read more than my share of inspector general and Government Accountability Office reports. So I have points of comparison when I say that this was one of the worst, weakest, most half-hearted attempts at an audit report I’ve read.

There was no substance. There was no detail. There was no support for the conclusions the auditor drew. It makes me think council made a terrible mistake when it elevated Denny Nestor to the position of permanent city auditor.

Denny is a good man, and a competent enough fellow, but he obviously lacks the sort of watchdog instincts I would want in a city auditor.

It’s not necessarily all his fault, however, since he gets his marching orders from city council. And council, at least in recent times, just isn’t comfortable with aggressive oversight — as the controversy surrounding this audit showed. Nestor is part of a city system that only pays lip service to oversight, because the auditor’s recent bosses on council don’t really want dirty laundry aired in public.

They keep the city auditor on a short leash and prefer that “problems” be resolved “collegially,” on the inside, with as little public scrutiny as possible.

The mixed signals the last council sent on the importance of doing a thorough and aggressive job on this, which had some of my former colleagues effectively arguing that the auditor shouldn’t be too thorough, while others opposed even doing this, gave Nestor permission to sleepwalk through the process. And he obviously did just that.

It wasn’t that long ago, remember, that the city didn’t even make complete audits public. They were shared with council but not open to wider scrutiny. I remember this because I, as a former editorial page editor, had to fight alongside other Gazette staff to force the city into making complete reports available.

And the city, though it now publishes auditor reports on-line, hasn’t made great strides since then in terms of cranking-up its oversight work. This pathetic excuse for a performance audit underscores the point.

I’ve frequently argued in the past that we need an elected city auditor — one who will owe his or her first loyalty to taxpayers, not to city insiders, who may not have much interest in uncovering embarrassing stuff.

I’ve concluded that this is the only way we’ll get the aggressive oversight this city and its enterprises need. This episode convinces me that this idea has merit. Removing the auditor’s office from under council control may further weaken council.

But given the lack of appetite recent councils have had for letting the “watchdog” off the leash, this would be no great loss.

Paige is a former City Council member.