By J. Shadé Quintanilla
When Pasadena officials discovered that a city employee managed to embezzle millions of government funds, they recognized the many flaws in their operational and operational oversight.
In March 2014, the city uncovered that Danny Ray Wooten, a management analyst of the Utility and Underground Program (UUP), funneled $6.4 million of funds intended for placing utilities underground to a church that he was affiliated with. Officials found that Wooten managed to steal millions over the course of 11 years by making fake invoices and forging signatures to a contractor – a friend – and two church organizations he ran. Four employees in the public works department have been placed on leave and two department heads were fired without cause earlier this year. A civil and criminal case has been filed against Wooten.
While the case is pending, the city has also made an effort to identify ways it can move forward and prevent embezzlement from happening again. Through three separate audits launched earlier this year, including one carried out by the new Task Force on Financial Administration and Internal Controls, the city has received close to one hundred recommendations and carried out various changes within its finance committee and the UPP.
On Monday, City Manager Michael Beck informed the City Council about recent changes and next steps within the finance department.
“2015 has not been a perfect year for us,” he said. “But it’s one that I’m hoping the history books will write a little bit about how effective and how hard the city staff has worked to put things in a much better position as it relates to accountability and financial control.”
Among the implemented changes was the hiring of more staff for financial processes. A major flaw the audits pointed to was the lack of personnel. At the city council meeting, Assistant City Manager Julie Gutierrez noted that while Pasadena was going through financial struggles during the early 200s, the city reduced staff so much that they were left with one person in charge of certain financial processes. In order to closely monitor finances, Pasadena has added more staff to review expenses, hired an internal auditing manager and awarded a contract for a fraud risk assessment.
The city has also been working towards monitoring all of its vendors with a lot more scrutiny. Through an enterprise resource planning system, Tyler Technologies’ Munis, more protections over purchase orders and contracts have been in place. In addition, Pasadena has adopted new procedures requiring all vendors to fill out a W-9 form and acknowledge their understanding of the city’s code of ethics.
Other changes implemented have included separating the accounts payable section from the purchasing division in the finance department, limiting the use of special handling check requests and revising a manual of personnel and administrative rules that will require more training for city employees, especially those in the finance department.
Pasadena will also implement many of the auditors’ recommendations that they have not addressed. A couple of the recommendations from the Financial Administration and Internal Controls are for mandatory time-off for employees and semi-annual training about ethics. In addition, the city will work to have their employees follow a “see something-say something” motto to encourage reporting of suspicious actions.
Although Pasadena fell victim to one of the largest embezzlement cases in Southern California, the city manager ensured council members at Monday’s meeting that the recent embezzlement case does not point to a “fundamentally-flawed operation.” He noted that no other city employees were in involved in the incident other than Wooten.
“This was one individual in one department that manipulated and took advantage of the process to benefit himself and his interests,” he said. “We haven’t found any remote indication that this was happening anywhere else in the city.”
The council has not created a deadline for recommended changes, but Mayor Terry Tornek stated that the city will work to have matters taken care of as soon as possible.
