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Testimony of
Hon. Alan Butkovitz
Controller
City of Philadelphia
Before the City Council Committee of the Whole on the
City Controller’s FY 2008 Operating Budget
April 18, 2007

Good Afternoon, Madam President and Members of City Council. I am City Controller Alan Butkovitz and I am here today to testify on the City Controller’s Fiscal year 2008 Operating Budget.

I am joined by Deputy City Controllers Harvey Rice, Albert Scaperotto and John Thomas, as well as our Administrative Services Director -- Andrea Rose.

I want to open my remarks by thanking City Council for supporting me and my initiatives to make city government more efficient and accountable – and in the process - saving city taxpayers millions of dollars.

The Mayor’s proposed FY 2008 Operating Budget includes a General Fund appropriation of $8,254,796 for the City Controller’s Office. This allotment is earmarked for 140 budgeted positions. This budget reflects the 2.5% reduction in personnel costs that the Mayor has requested of all city departments. The Controller’s Office, like other departments, is committed to doing more with less.

Last year the Controllers’ Office issued 28 departmental audit and financial opinion reports and 10 performance audit and or special reports. In those reports, we made 132 recommendations which if implemented -- would realize a $71,000,000 financial benefit to the city. For every dollar allocated to my office for personnel costs – the city realized eight dollars in financial benefits.

A major emphasis of my office has been to conduct performance audits to determine if a department or program is achieving its stated mission in a cost effective, efficient way -- and if additional savings could be realized by utilizing new management or technology tools. While performance audits can be costly, they generate substantial savings when our recommendations are implemented.

Our performance audits – including the Police Facilities Audit, L&I Housing Inspection and Enforcement Audit, Robin Hood Dell East Audit, the Bio-Solids (Synagro) report and the Schools Facilities Audit not only uncovered areas to save tax dollars but also addressed concerns affecting the public and city workers.

Our Police Facilities audit uncovered that Philadelphia’s finest were working in some of the most hazardous, unsanitary and unsightly conditions possible. We highlighted the lack of adequate funding to correct these hazards and provide basic maintenance.

It was unconscionable that thousands of Philadelphia police officers — who risk their lives each and every day to protect the citizens of this city — were forced to work under these substandard – if not dangerous – conditions. As a result of our report, City Council moved quickly to remedy this situation by authorizing $30 million to address these conditions in many of our police districts, fire houses and recreation facilities. You should be commended.

Our audit of L & I’s Assessment of Housing Inspection and Enforcement Process found that L&I met the mandatory 24 hours response time for imminently dangerous conditions -- only 30% percent of the time.

In addition to the departmental and performance audits, my office audited the spending practices and operational budget of the Philadelphia School District. Realizing that the budget for the School District of Philadelphia is approximately $ 2.2 billion – about half of the city’s budget – we uncovered that while the School District was claiming to have a balanced budget, they were in fact operating at a deficit which we have now been told could exceed $180 million. In Fiscal Year 2005, Risk Management had Personal Services budgeted for $206,700. The actual spending was $2,994,812. In Fiscal Year 2006, Risk Management had Personal Services budgeted for $217,700. The actual spending was $8,539,788. In the course of our examination of the School District’s spending practices, we uncovered financial inefficiencies, misleading and non-transparent budget projections and information concerning fiscal issues, as well as physical conditions within the schools.

Our pre-audit unit was instrumental in saving the city hundred of thousand of dollars by uncovering duplicate payments to vendors, false claims by vendors, and inappropriate reimbursements. In addition the Pre-Audit Unit streamlined the payment process by eliminating one entire day in the process. Payments are now processed in four work days.

And lastly – I want to commend Councilwoman Jannie Blackwell for joining me in fighting to have the Philadelphia Pension Board divest from companies doing business with the Sudanese government – until they stop the genocide in Darfur. To date, the Sudanese government has murdered over 450,000 of its own people. I am proud to report that Philadelphia is the largest American city to divest from companies doing business with the government of Sudan. And I am proud to say that our City Council helped us divest.

Looking to the future, my goal for the coming year is to continue identifying waste, fraud, mismanagement and inefficiencies in city government -- and to save tax dollars. I want to continue working on issues that improve our overall quality of life – and make Philadelphia a better place to live, work and raise a family.

In the coming year I will continue my fight to oppose the BRT’s proposed full valuation property reassessment The full-value reassessment would dramatically harm all the progress and neighborhood revitalization we have experienced over the past decade – thanks in very large part to the building renaissance envisioned and realized by Councilman DiCicco’s tax abatement program. And I will continue to seek ways to improve and increase minority participation in city contracts.

I want to thank members of City Council for this opportunity – and for your support during the past year – and I look forward to working with all of you in the coming year.

My staff and I will be happy to answer any questions.