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COMPTROLLER POLONCARZ

Statement of Erie County Comptroller Mark C. Poloncarz
On the Release of the Erie County Comptroller's Audit of
Wireless and Cellular Telephone Devices
For the Period January 1, 2001 to December 31, 2005

April 11, 2006

For Immediate Release
Contact: Timothy Callan 716-858-8801 or 716-858-8404

My Office today is releasing our audit of Erie County Government's cellular telephones and wireless devices.

Let me start by noting that this was a comprehensive and thorough review of the County's wireless devices. Over the past two months, our audit staff has literally gone line-by-line, page-by-page through the individual phone bills of hundreds of County telephones checking usage, assignments and charges. Our audit staff made hundreds of phone calls to nearly 200 County wireless devices, to determine who possessed the phones and was using them. For those of you who have covered County government and prior audits, you will note a difference in this document. This is an in-depth review.

This audit was done according to generally accepted audit procedures. This was a professional audit, conducted by professionals in the Office of Comptroller.

Yesterday, the Giambra Administration leaked this confidential draft audit document to a media outlet prior to the formal exit conference. This is a serious matter.

The Giambra Administration's decision to leak this draft document to a media outlet violates generally-accepted auditing practice and county precedent. Once this Office has completed a review of a department or issue, we provide a confidential draft copy of the audit to the department involved, and schedule an exit conference. The purpose of giving the draft audit to the department and scheduling an exit conference is to allow the department under review the opportunity to review our findings and recommendations and offer comment. If, for some reason, there was an error with our findings or data, the exit conference allows the department the opportunity to bring that to our attention, and for our Office to correct any errors.

This Office had originally scheduled the exit conference for this audit with the Division of Information and Support Services ("DISS") for yesterday, April 10th. However, when notified that the director of that office, Arthur Telaak, Jr., was on vacation through April 17th, and at their request, we agreed to postpone the exit conference until April 18th so Mr. Telaak could participate.

However, we learned last night that the Giambra Administration had leaked the document to a media outlet when a reporter from that organization contacted one of our staff requesting comments. Rather than meet with our audit staff to discuss the findings and address issues, the administration chose to leak the document and attempt to "spin" the audit and engage in damage control.

To the knowledge of this Office's staff, some members of which have over three decades of service to the county, at no point - ever - has a draft audit been leaked prior to an exit conference. Never. This includes the Aurora DPW audit and the Buffalo Office Interiors audit - neither was leaked.

The Giambra Administration's decision to leak a confidential, draft document prior to the exit conference violates a long-standing auditing practice and challenges years of audit precedent. As you can clearly see on the document, it has a watermark clearly stating that it is an "exit conference draft" and is "confidential." My Deputy Comptroller for Audit engaged in e-mail exchanges with Arthur Telaak, the director and Kenneth Beam, the deputy director of DISS - the only two people outside of my Office who had the draft document - in which it was clearly stated this was a confidential draft document, and could be subject to revision at the exit conference.

This breach of audit practice also appears to violate Erie County Local Law 10-1989, which states that "no elected official, county officer or employee shall… disclose confidential information acquired by him in the course of his official duties or use such information to further his personal interests." I thereby call on the County Executive to immediately disclose who leaked this report to the media outlet, and to outline what disciplinary actions he will take against that individual or individuals.

I am particularly bothered by their actions because yesterday afternoon, I spoke with the County Executive on another matter, and he brought-up the audit in that telephone conversation.

I can only conclude by their actions that the Giambra Administration and DISS do not want to hold an exit conference and they do not disagree with our audit's findings. Therefore, we will be issuing a final copy to the legislature today with copies based on this draft, and DISS will have 30 days to respond to the findings contained herein.

In fact, in today's newspaper, the Deputy County Executive basically accepts the audit's findings and concedes the administration's management of wireless devices has been non-existent.

The Giambra Administration may not behave professionally, but this Office does, and will continue to do so.

I will now address the major findings and recommendations of our audit.

Our audit finds that under the Giambra Administration, DISS (and department heads) have grossly mismanaged County cell phones and wireless devices. There is a fundamental lack of internal controls over wireless devices and a finding that no one is monitoring these phones. Literally, we believe that no one is minding the store. That is a disservice to the taxpayers of Erie County.

Let me share some of our major findings. To save time, I will provide these findings and recommendations in bullet form:

  • At December 2005, the number of wireless devices had risen from approximately 500 in 2001 to 691. Also, we believe that at some point in 2005, the County had approximately 900 wireless devices. The County maintains 90 Blackberries.
  • At least 84 County employees have two or more wireless devices, with many having both a cell phone and a Blackberry.
  • The County maintains 594 wireless phones, including the Blackberries, with Cingular and another 97 phones with Verizon Wireless.
  • Over the period of our audit, 2001-2005, cell phones cost the County $1.2 million. County employees, including Giambra appointees and department heads, downloaded games, ring tones, and other Internet data, incurring charges.
  • County employees, including Giambra appointees and department heads, but also civil servants routinely made long-distance and roaming calls for personal use, including making personal and long-distance calls while on vacation in places such as Florida, Las Vegas, etc.
  • County employees routinely make directory assistance calls, incurring $1.50 per call charges, including habitual offenders.
  • DISS allowed the providers to assess fees and charge the County for services and features that our contract specified were not to be charged, including termination and activation fees and charges for voicemail access.
  • County employees purchased equipment on their individual County cell phone accounts with no documentation to support the purchases and in some cases, no documentation on exactly what was purchased.
  • DISS omitted from the records provided to this Office detailed call records for at least one user in the County Executive's Office. That phone number incurred charges of $615.35 in December 2005, including 4,042 minutes of use in that month alone. We cannot determine who uses that phone.
  • Despite our repeated requests for the missing documents concerning that user's detailed call record, DISS has refused to provide the documents, suggesting our audit staff misplaced the records.
  • Many County employees have minimal to non-existent usage of their County cell phones, raising the question of why they have phones at all.
  • Other employees have extensive usage, including in some cases massive data downloads, raising concerns over excessive or abusive use.
  • DISS' internal tracking spreadsheet for monitoring cell phone usage had significant errors, omissions and gaps. Provider billing records are also frequently inaccurate.
  • County employees across the board, from department heads-on-down, routinely violate the existing County wireless policy with no consequences whatsoever. Both DISS and department heads, who are supposed to monitor their department's usage, do not monitor anything.

The final, and most significant finding is that County employees, including at least two were laid-off in March 2005 - Jeffrey Hammond and David Pfaff, both political appointees of and political operatives hired by the County Executive - continued to have their County cell phones in late March 2006, and continued to make calls and incur charges at taxpayer expense more than 12 months after they left the County workforce.

This audit has 31 major recommendations. The highlights are as follows:

  • DISS should reduce the number of County wireless devices.
  • DISS should restrict to whom it provides such devices.
  • DISS should restrict users to one phone, and not two. Employees should not have a cell phone and a Blackberry.
  • DISS should recoup improper payments made to the providers for charges we should never have paid.
  • DISS should immediately prevent any inappropriate charges for services and features and not pay providers for such charges.
  • DISS should block County employees from making long-distance and roaming calls.
  • DISS should block County employees from downloading games, ring tones and other Internet data.
  • DISS should establish a policy to limit directory assistance calls.
  • DISS should block County employees from purchasing equipment on their individual accounts.
  • DISS must correct its internal tracking spreadsheet and provider billing records.
  • DISS should revise the wireless policy to prohibit all County employees from making personal phone calls and refer violators for appropriate disciplinary action.
  • DISS should monitor for excessive usage and restrict such usage.
  • DISS should consider terminating the contract with Verizon.
  • DISS and the Bureau of Purchase should consider re-bidding the Cingular contract to attain a lower rate and better plan; and finally
  • The administration should immediately check for former County employees using County phones and recover those devices, terminate access and pursue repayment for usage.
In conclusion, this audit finds serious and widespread problems in Erie County's management and control of wireless devices. Controls are essentially non-existent. Management over these devices is limited at best.

The Giambra Administration states that DISS was unable to properly monitor wireless devices due to the layoffs in that division in March 2005. That explanation falls flat, however. This review shows that these management and control problems were in place prior to 2005, and that DISS and department heads were engaging in the same behavior (or lack thereof) prior to March 2005. DISS will say that due to cutbacks, they did not and do not have the staff to oversee wireless devices. I will remind the administration that in March 2005, the Office of Comptroller went from 62 employees to 31, including losing many auditors. In the adopted 2006 Budget, this Office has 34 employees. DISS went from 57 employees to 47, and is now back to 57 employees in the adopted 2006 Budget. If this Office can continue to function and engage in its oversight responsibilities, then we expect and demand that DISS do the same. The taxpayers demand no less.

This Office will continue to serve as the independent fiscal watchdog for Erie County's taxpayers.

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