Auditor's Report Finds Flaws in Richmond, Va.'s Financial System

Deficiencies in the implementation of the wide-ranging RAPIDS system have led to vendors not being paid on time, an inadequate reporting function, inaccurate leave balances and little comfort among system users.

The most recent report out of the Richmond, Va., Auditor’s Office cites a lack of planning and testing for the city’s new $18 million financial system.

But the report itself took a back seat to larger questions Tuesday about how the administration of Mayor Dwight C. Jones responds to the city’s own audit process.

City Auditor Umesh Dalal said deficiencies in the implementation of the wide-ranging RAPIDS system have led to vendors not being paid on time, an inadequate reporting function, inaccurate leave balances and little comfort among system users, but he said the true impact will not be known for some time.

“Lack of contingency planning exposed the city to the risk of being unable to continue operations in the event of a significant system failure,” his office’s report says.

Bob Baker, IT audit manager in Dalal’s office, also raised concerns about vetting for system access and the potential for “fraud and sabotage.”

“Users in the focus group did not think that they were prepared to use the system,” Dalal said.

But Sharon Judkins, who oversaw the RAPIDS project as deputy chief administrator of finance and administration, took issue with that characterization by saying the system works and that it’s not unexpected to have to deal with some issues in projects of this magnitude.

“To not portray this as a success I think is just not fair,” Judkins said.

The RAPIDS project, which the city launched in 2010, was initially scheduled to be completed in late 2012. The “go-live” date was pushed to the middle of last year because of lingering issues.

Judkins said the project has been completed and argued that the audit spread beyond the boundaries of the RAPIDS project.

Audit Committee member Walt Kucharski seemed to agree.

“We’ve got the Titanic here,” Kucharski said. “And you’re asking the guys who are basically feeding coal into the engines to respond to a report about what the captain’s doing.”

But the auditors said they had made Chief Administrative Officer Byron C. Marshall aware of the recommendations, even noting in the report that they were being made to him, and that they did not receive a response.

City Council President Charles R. Samuels pressed Judkins on whether she discussed the audit’s recommendations with Marshall and how he responded.

“President Samuels, with all due respect, I think that’s a different topic from what we’re talking here,” Judkins said. “If you want to know the conversation that Mr. Marshall and I had, we can bring you in and have that conversation.”

“Ma’am, with all due respect, we have 200,000-plus people and we’re trying to be good stewards of taxpayer money,” said Samuels, 2nd District. “If an issue comes up, regardless of how it comes up, and (a deputy chief administrative officer) is aware of it and doesn’t do anything with it, that causes me grave concern.”

Judkins said Marshall shared her view that some of the recommendations were not specific to RAPIDS.

After pressing further for an answer on what action the administration took after learning of the citywide recommendations, Samuels said: “I think my point’s been made.”

“I think your point is not,” Judkins shot back.

The audit suggested seven recommendations for improvement; the administration agreed with three of them.

The recommendations rebutted by the administration were proposals to adopt a standard governance framework for large-scale projects; the development of internal controls to adhere to the framework; the development of new policies for the Department of Information Technology; and a strengthening of citywide project management policies.

The administration rejected the notion that RAPIDS suffered from inadequate planning and said the recommendations were outside the scope of the audit.

The administration concurred with three other recommendations, one that proposed a standard structure for document retention and two dealing with reviews of access to the system.

In a letter accompanying the report, Dalal said his office faced “significant challenges” with cooperation from officials, specifically pointing out that auditors did not receive details they had sought on RAPIDS expenditures.

“In the absence of full disclosure and proper classification of all expenses, it is not possible to verify if the project was completed at, below or over budget,” the letter states.

Dalal reiterated that concern after Tuesday’s meeting.

“Resisting audit processing does not help the organization,” Dalal said. “As a matter of fact, addressing issues found in audits would move the organization forward.”

Judkins said she and her staff have been persistently bewildered by the audit’s broad sweep.

“This has been one of the most difficult, time-consuming processes that we have been involved in,” she said.

The committee did not vote to accept the report, opting instead to instruct Dalal’s office to first specify precisely which recommendations should be addressed by Judkins and which need to be dealt with by someone higher up the chain.

“If that’s the mayor, that’s the mayor,” said committee member Nick Valdrighi. “I don’t know.”

©2014 the Richmond Times-Dispatch (Richmond, Va.)

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