Alderman proposes watchmen department

By Darryl Holliday

The term “forensic audit” is mildly deceptive, though according to a growing number of city and state leaders, it could be exactly what Chicago needs.

Alderman Scott Waguespack (32nd Ward) has most recently elevated the issue of a comprehensive audit through calls to open Chicago’s books.

According to Adam Andrzejewski, founder and CEO of For the Good of Illinois, the issue is poised to be an important factor in upcoming state and city elections.

“A forensic audit would do all of the fact finding and legal exploratory work that prosecutors could then use to prosecute corruption and clean up the state,”

Andrzejewski said.

The audit is largely about finding any proof that could be used in court, depending on irregularities—if any are found.

Associate professor William Kresse, director of the Saint Xavier University Center for the Study of Fraud and Corruption, said the term has been “bandied about.” However Kresse put forth a more specific definition: “Internal audits with proactive fraud examination components.”

All of the terms basically amount to the same thing—a labor and resource intensive analysis of city spending.

“The nuts and bolts [of the proposal] would essentially be pulling together an independent budget office to go through contracts and departments, and have auditors go through to see if they can find ways to root out waste, inefficiency and any corruption that’s in some of these contracts, or in some of the ways that we run the city,” Waguespack said.

The audit called for by Waguespack would focus largely on the Daley administration—especially the mayor’s complicated Tax Increment Financing funds.

According to Joe Ferguson, Chicago’s inspector general, the TIF funds have “very little transparency in standards, protocol and tracking.”

Andrzejewksi said the TIF funds would be “an outstanding place to start

an audit.”

Recently, the Office of the Inspector General, a six-person staff charged with the proactive identification of waste for a city budgeted at more than $6 billion a year, found one particular TIF fund in which an account that had been completely closed out contained $1.2 million in taxpayer money. According to Ferguson, the money had been sitting unbeknownst to anyone for three years and was eventually redirected back to the city.

This is exactly the sort of waste an internal audit aims to prevent.

“If we continue to do business the way [Mayor Richard M. Daley] has done over the last 20 years, then we will be broke,“ Waguespack said. “We will become insolvent.”

Likely the most agreeable part of any forensic audit to city residents is that when done right, it pays for itself.

A forensic audit for a city the size of Chicago might cost a couple of million dollars, according to Kresse, but assuming the inspector general is independent of political influences, he said in the short and long runs it should save taxpayers money.

The Office of the Inspector General is indeed independent of partisan politics, according to Ferguson. Though appointed by the mayor, the inspector general’s term is not tied to the mayor’s tenure. In fact, it is one of the few city positions in which the office holder cannot be removed at will.

“If I’m politically influenced, I should be drummed out of office,” Ferguson said.

Though Waguespack concludes that Daley would never allow a forensic audit, he said he believes the audit would “absolutely” find aspects of city administration that could be made more efficient, in order to save money through cutting corruption and wasteful spending.

With what Kresse calls a “woefully underfunded” Chicago Inspector General’s office, Waguespack’s call for a nonpartisan independent budget office is receiving attention from both political sides.

Andrzejewski, a republican, attempted a similar approach in March with the Forensic Audit Act (HR 1057), which focused on the Illinois State budget. However, the act was defeated along partisan lines.

Waguespack argues his proposal for a comprehensive audit wouldn’t be a one-time only review but would occur annually.

He also cited a new 10-year contract between Lollapalooza and with a private company represented by Daley’s nephew, Mark Vanecko as “the kind of stuff that needs to be looked at.”

Considering Chicago’s history—for example, in the last 38 years, 29 current and former Chicago alderman have been sentenced to prison—the list of sources where fraud and/or corruption may be found could be extensive.

“Audit is one word for it, but it’s essentially getting down to the nitty-gritty,”

Waguespack said.

In the long run, residents will decide if such an audit is in the city’s best interest. An opening for mayor, along with the upcoming election season, could provide the opportunity for enhanced transparency.

“[A forensic audit] is more than just trying to locate someone who’s driving a city car to his vacation home,” Kresse said. “This can have much wider implications in the way people behave within the city and government.”

According to Ferguson, there’s a place where auditing for the city is already

being done.

“If we are serious about believing that more of it needs to be done, it’s a simple fix: Give the inspector general’s office more resources to do it,” Ferguson said.

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