Editor’s note: This article is part of a series. Click here for the previous article.
Gordon Graham here and thanks for taking the time to read my ramblings about risk and how a full understanding of this discipline can benefit your police department operations. We have covered eight of the 10 Families of Risk and will now move on to Family Nine—financial risks in public safety.
There was a time in my career as a cop that I could verify the check digit on a 17-digit VIN (and please do not refer to it as the “VIN number”—that is what the “N” in VIN stands for) in my head. Now most of you reading that statement are thinking, “So what?” But if you ever worked auto theft you are thinking, “Now that is impressive.” To be fair, there were a lot of things in police operations that I performed in an only acceptable manner, but catching car thieves was one of my specialties. VINs and license plates are filled with numbers and I like numbers.
Numbers and I have always gotten along. While I am now 17 years post-retirement, I still enjoy gassing up my car and in my head dividing the miles driven as evidenced on the trip meter by the amount of gas and coming up with the MPG to the nearest tenth of a mile. I dazzle my lovely bride in the grocery store by adding up the prices of things she is buying and predicting the amount that will show up on the cash register at checkout. My kids think I am nuts!
My guess is this all started with my mom who, when she was walking me to grade school, repeatedly drilled me on multiplication tables and division problems. As a result, it is difficult for me not to add up numbers I see. When I was traveling on the buses in San Francisco as a kid, I often asked the driver for “a transfer”—a strip of official paper that allowed you to transfer for free or for a reduced fee to another bus to get to your destination. There was an eight-digit number on this transfer—and as you probably surmised, I routinely added the numbers up, as did many other kids. If you had a total of 21, that was a sign of good luck coming your way.
It is the job of the Chief Financial Officer to build appropriate systems (policies, procedures, protocols) addressing all things related to finances and to ensure these systems are being taken seriously through a rigorous audit process.
Why am I boring you with this? In my last article I mentioned my early days as a lawyer doing police divorces. I usually was retained by the husband because most cops were men back then. I would ask him to bring his wife to my office, where I told them, “You can spend 100K arguing about things for a couple of years or you can act like adults and fairly share the community assets and be done with this marriage quickly.”
Fortunately most of the divorces I did involved short marriages with no kids from the relationship. I was often able to get him to turn over ownership of the house to her and get her to turn over ownership of her share of his pension to him. But I always interviewed them separately, just to figure out what was going on in the relationship that led to the divorce. And as you might suspect, the reasons for the split were pretty predictable.
One time I was chatting with an officer’s wife about all the things that led her to want a divorce: “The thing that bothers me the most is how stupid he is with math. He hates numbers and cannot balance the checkbook and when I go to the store the check I write later bounces. He does not know how to subtract and tells me that numbers make his head hurt.”
About a decade later I was doing some work in this officer’s department and as I walked past the budget office I noted the head of the unit was the “numbers make his head hurt” fellow. During our conversation I said, “I did not know you had a degree in finance.” And he responded, “I hate numbers, but I have a great staff and this is only a two-year assignment.” This is also the fellow who bought several years’ worth of “D Cell” batteries in order to get a better price—not realizing the life of the battery in storage was very short!
So a multimillion-dollar budget is being run by someone with no formal financial training and who admits his brain cannot comprehend numbers! Sadly, this lack of math skills in financial roles is not uncommon in police agencies.
It is not just the “mathematically challenged” people that worry me—it is the “mathematically skilled” people who lack integrity and are in charge of a department budget. Witness Rita Crudwell from a small city in the Land of Lincoln.
Here is a summary from Wikipedia: “Rita A. Crundwell was the appointed comptroller and treasurer of Dixon, Illinois from 1983 to 2012, and the admitted operator of what is believed to be the largest municipal fraud in U.S. history. She was fired in April 2012 after the discovery that she had embezzled $53.7 million from the city of Dixon for over twenty-two years to support her championship American Quarter Horse breeding operation. Crundwell pleaded guilty to her crimes and was sentenced to 19 and a half years in prison.”
Do not think I am picking on Illinois. Over the 40 years I have been looking in-depth at police department operations, there have been financial scandals in every state in the union. Take, for instance, the officer who used department email to send a message to another cop: “I see you are working on Friday and I am working on Saturday. Why don’t you call in sick on Friday and I can backfill you on overtime and I’ll call in sick on Saturday and you can backfill me.” This sounds like a criminal conspiracy to me!
I have had scores of cops in my law office over the years in trouble for overtime theft, misuse of city credit cards, theft from parking meters, falsified travel expense claims, misuse of grant money, theft of funds from special programs, theft from petty cash—and many other bad behaviors that end careers.
So how does this happen? It is the job of the Chief Financial Officer to build appropriate systems (policies, procedures, protocols) addressing all things related to finances and to ensure these systems are being taken seriously through a rigorous audit process.
Speaking of audits—here is a story from Seattle: Citizens who have dealt with Seattle Police Officer XXXX say he is a good, hard-working cop—but public interest groups are wondering how he ended up getting paid more in 2019 than the mayor, the police chief and even the president. The 58-year-old patrol officer made $414,543, more than any other city employee, the Seattle Times reports. According to police department data, XXXX worked an average of 80 hours a week, including seven straight weeks in the summer where he worked between 90 and 123 hours a week. On six days, he was paid for more than 24 hours in a day, though auditors say this could be the result of overtime being logged late or contract provisions that require minimum amounts of overtime. Auditors say Seattle police officers also sometimes receive “standby pay” when they are already on duty.
In no way am I suggesting the involved officer did anything illegal—but assuming he worked the shifts as reported, there is no way this cop was not dangerously fatigued all the time. Was there a policy on how much overtime can be worked? Was it being taken seriously? How did this not get caught by some audit or inspection?
Let me wrap up with this: Please take a look at the pie charts your city uses to show citizens where the city funds come from and where the funds go. My experience tells me one of the biggest slices of the pie on the “money out” pie chart is public safety. Our hardworking, taxpaying citizens deserve financial accountability from their police and fire departments. They must have confidence that the funds the public safety agency receives are being properly spent. Ensuring that confidence is the role of the finance unit (or whatever you call it in your operations)–and the buck stops with the person running that operation.
In my next article, I will explore the top 10 financial risks experienced by public safety agencies and provide some recommendations on systems to prevent these problems.
Until then, please work safely. These are very challenging times for everyone in public safety and my hat is off to you for your ongoing efforts to properly perform your rightful work.
Timely Takeaway—What percentage of your city budget is dedicated to the police or fire department? What percentage of your budget goes to personnel? What can you do to reduce expenditures in your department?