Technology often a vehicle for fraud, waste, mismanagement: City Controller Alan Butkovitz [Q&A] - Technical.ly Philly

Dec. 2, 2011 11:00 am

Technology often a vehicle for fraud, waste, mismanagement: City Controller Alan Butkovitz [Q&A]

City Controller Alan Butkovitz and his office are good at finding the lede. The elected official charged with auditing city government and council spending continues to make news by highlighting the most egregious examples of waste, fraud and mismanagement. Like yesterday’s announcement that half a billion dollars of taxpayer money is being managed by outdated, […]

City Controller Alan Butkovitz and his office are good at finding the lede.

The elected official charged with auditing city government and council spending continues to make news by highlighting the most egregious examples of waste, fraud and mismanagement.

Like yesterday’s announcement that half a billion dollars of taxpayer money is being managed by outdated, unsupported technology from 1996 in the city’s procurement department. Or an October audit that showed, among  other shortcomings in the city’s often criticized Sheriff’s office, that its less-than-stellar website had apparently cost $2.9 million over five years. (Yesterday, a sheriff’s employee was charged with a scam that bilked the city out of $400,000, ahead of state Rep. Jewell Williams taking office in January.)

In his second term since first being elected to the position in 2005 following a 15 year tenure in the state House of Representatives, Butkovitz, 59, seems to enjoy the gig. He is serious and detailed, eager to discuss the 400-page audit report on the Sheriff’s office one recent November afternoon, with a tuft of his gray hair falling toward his cheek in a sunny corner office of the Municipal Services Building in Center City.

Butkovitz, a resident of Castor Gardens in the Northeast,, has not been without his critics. In his 2009 Controller campaign against a younger, more progressive tax advocate, Brett Mandel portrayed Butkovitz as a machine politician who focused less on auditing each city agency as the City Home Rule Charter [PDF] requires and more on bigger, headline-grabbing and politically-strategic investigations.

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Still, with increasing frequency, Butkovitz’s claims of waste, fraud and mismanagement at the city level involve technology: IT infrastructure, agency software and the shortcomings of it all.

Below, Technically Philly talks tech, taxes and hackathons with the West Philly native and graduate of Overbrook High School and Temple University.

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Edited for length and clarity.

Why is technology so frequently a subject of your recent reports?

There are always failures to reach agency goals because computer systems are inadequate. And they require multimillion dollar upgrades and the people are not able to be adaptive to it. Technology is a solution and so when it’s so behind, it causes problems everywhere. In the Sheriff’s Office case, it’s always an excuse for why the city doesn’t know what’s going on.

Nearly every municipality talks about being behind on technology. Are your expectations realistic for city IT?

I think a more major problem is that city personnel are not in a position to implement new technologies even when they are brought in.

Why not?

On the whole, city personnel are not familiar wtih these systems, and they want to do the way they’ve always done things. …We had that problem with 311, which is in part an issue that city goals were greater than capacity. The investment in the hardware and software is not made what is made in other cities and not enough to reach those goals set.

The city’s had a major deferred maintance problems for decades. So you see it in the Parks and Rec facilities with, you know, an injurious piece of metal sticking out and, yes, you see it with technology, in that they’re always just patching.

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But is that just a reality of under-funded city budgets? Can the expectations be met?

Sure, PGW has done fine with goals [for IT]. If there’s leadership and mid-level management committed to changes, they get it done.

It bumps up against other priorites, like no tax increases, bad economy, no cuts in fire houses, no cuts in  libraries, and [technology] becomes one of those easy places to cut.

We also had this problem with rescue squad dispatch. …We wanted them to implement tele-nursing and other triage methods — by the fire department’s own admission, half of their calls are not emergencies. Because that can mean people that are in mortal danger are not getting service and someone with a minor ailment is, all sorts of procedures to improve priority should be implemented. [The city is] finally installing GPS devices in rescue squads because they go from one end of the city to the other, so it’s a good idea to not get lost — they’re not like police districts. The other thing is the need for ID software like police to find the origin of a cell phone call.

There is a company in Princeton [MONOC] we visited that have much more ability than that. They can, for example, identify nuisance calls: they do a check of chronic callers on certain days and times and can do diversion methods for those. There are things out there to show what is possible to do. And here, there’s a system that is decades behind that. — And the software behind the Princeton company is just $1 million. It’s not an expensive package.

What is the best example on return of investment for technology upgrades at the city?

We have an enormous unpaid tax, unpaid bill problem. And the technology the city has doesn’t allow them to track down delinquents when people move, for example. This is a city that has about $400 million in accounts receivable and taxes, unpaid bills of all kinds. We’ve done reports that when L&I does a demolition for imminently dangerous building, they don’t send bills out [to those building owners].

You don’t need to get to internal efficiencies [for ROI], there are standard accounts receivables that are owed to the city as a business that are just water down the drain because of the inadequacy of the technology of the city.

What’s the most egregious example of city waste because of technology?

Those accounts receiveable.

Why? What’s step one to improve that. Technology or workforce?

It’s technology and then updating workforce.

You know, [Illinois Sen.Everett] Dirksen in the 1960s used to say that if you take a billion here and billion there, soon it adds up to real money. So first of all, a half a billion dollars in accounts receiveable is real money. So it would be worth fixing, if it was just recovering the money, but it also has this impact of…. if no one is paying your bill [to the city], if you’re not doing a good job of collecting from this person, why should I care? So it perpetuates itself.

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You just released a big report on waste in the sheriff’s office. What’s an example?

They charged for maintaining a website for five years $2.9 million years [laughs]… And it’s not very good.

So what’s the conspiracy? Was it a lack of understanding or real fraud?

It was organized as an insider operations so it’s highly suspect.

The private vendor happened to be the best friend and campaign manager [of criticized and embattled outgoing Sheriff John D. Green, who Butkovitz had said ‘disgraced’ the office]. So there was no internal control, no system to control them. Anything that came through got paid. They had free reign. Any bill that came in would get paid. We never found a contract that authorized any payment for websites. So they charged $2.9 million over a time for something that market rates could have kept to thousands of dollars.

They then turned around and they were advertising that if you wanted to bid on a sheriff’s auction, you had to send them $75 and they’d do it, rather than having anything online. They were getting paid from both ends. In a very sophisticated way, the Sheriff’s office was using their computer system to make outrageous profit.

And then they turned around and said ‘The reason we can’t figure out where $50 million belongs is because there’s a lousy computer system.” [laughs]

The sheriff’s internal computer system was so outdated, they couldn’t keep track of the money coming in from sheriff’s sales. If this was posted as a contract opportunity, in an era where technology costs are always lowering, is there some company somewhere in the world that could actually track where the money went? …I think so.

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How did you first find these high costs?

The red flag that initially drew us into this was that the majority of accounting changes [in the Sheriff’s office system] were cash adjustments, and it turns out the explanation for that was that the routine fees, repetitive fees they had to pay [for normal services] could not be accommodated in their system [audit p. 52]. Those were standaed fees that needed to be paid, but their outdated system couldn’t handle that, so they had to make adjustments for something that was so basic, it needed to be built into the system.

…That started [the deeper audit].

So there was a conspiracy?

There’s no indicating that anyone from the sheriff’s office was going to be rigorous with this vendor [for the website build]. [laughs] …That’s as far as I should go.

The Sheriff’s office is a great example of the potential for open data. The tech community in Philadelphia has a lot of developers who are interested in hobby projects that make a civic difference. They want city data to make government more transparency and efficient. Have you pushed for more of that?

It sounds like a great idea, and it’s the first I’m hearing of it.

You should come to a hackathon. We’re co-sponsoring one this weekend.

I’d like that… We have done things like we had a $500 cash prize that only went for few months [asking for suggestions from city employees about improving government efficiency in January 2007 and other times].

I also think of [newly elected incoming City Commissioner] Stephanie Singer and her [Election data] project, built something that can allow people to track real time information, district by district. So in the Taubenberg/David Oh [City Council] race, you were able to see that even when on Election night, Taubenberger was winning, you would be able to see that many precincts in [Councilwoman] Marian Tasco‘s area hadn’t reported, which were supposed to go to Oh. So it can help with fighting voter fraud, it’s not just idle curiosity.

With new blood in City Commissioner roles running Elections by way of Singer and Al Schmidt, who ran against you for City Controller in 2009, do you expect improved transparency, as they’ve promised?

Well, they could certainly accomplish a lot, but the problem has never been a lack of high hopes in Philadelphia. There have been a lot of high hopes in recent years. It’s more a question of implementation. I will give Stephanie credit because she built her own website years ago when the city said it couldn’t be done, so she deserves credit for implementation. …In Philadelphia, it can be harder to make good on high hopes [than in other places.]

Companies: MONOC
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