Denver Mayor John Hickenlooper’s office is recommending sweeping changes to the city’s financial structure, including moving major accounting functions away from the elected city auditor.
The changes could be on the November ballot if the City Council signs off on the plan before the end of the month.
The recommendations come out of a blue-ribbon task force of outside experts appointed by the mayor after a series of unfavorable reports from national accounting institutions.
City Attorney Cole Finegan, who is also Hickenlooper’s chief of staff, told council members Wednesday that representatives of KPMG told the mayor, “What you have doesn’t work.”
After seven meetings and many presentations, the Mayor’s Financial Management Task Force has recommended the city create a chief financial officer who would oversee all of the city’s accounting and finances.
“Someone we can point to … and say that is really where the buck stops,” Finegan told council members.
That could mean major changes for the functions of the independently elected city auditor’s office. Currently, payroll and accounting go through the auditor’s office – something the task force identified as a conflict of interest.
Members of the task force said because the auditor issues paychecks and signs off on city contracts, the office is effectively auditing itself when it does performance audits after the fact.
Auditor Dennis Gallagher was out of town Wednesday, but in a presentation to the task force in June he said he was concerned the changes would hurt the city’s checks and balances. He vowed to fight “the Enronization” of the city.
His spokesman, Denis Berckefeldt, said the bulk of the problems pointed out by KPMG were on the administrative side of the government.
“Now they are saying, ‘We’ll fix them by rerouting accounting and payroll.’ You won’t.”
Still, he said, there are some things in the recommendations “we very much like.”
For instance, the task force said the changes would allow for a more “robust” internal auditing function.
Currently the city’s 102-year-old charter does not spell out auditing as one of the responsibilities of the auditor’s office. City officials and task force members pointed to that as an example of how outdated the city’s charter is.
“I think that needs to be done very quickly,” Councilman Rick Garcia said of fixing the auditor’s role in the charter.
Councilwoman Kathleen MacKenzie said that because the city charter does not give auditing as a role of the auditor’s office, the recommendations will make the auditor “more of the kind of auditor most people think he should be.”
It would allow the auditor to spend “more time doing audits and less time writing checks,” she said.
Council members asked for more specific information before they move the recommendations forward. Any recommendations that would require changes to the city charter would have to be approved by the full City Council before going on the November ballot.
Staff writer George Merritt can be reached at 303-820-1657 or gmerritt@denverpost.com.
