City Council auditor Bob Johnson is one of the few remaining City employees who has been around long enough to remember Jacksonville before consolidation. Johnson began as assistant council auditor in 1968, three months before the city and the county merged. The newly formed internal audit office had the unenviable task of trying to straighten out the fiscal concerns of the City of Jacksonville’s various departments and independent authorities that had little, no or shady bookkeeping. Johnson recently entered his 35th and final year with the City. Staff writer Glenn Tschimpke sat down with the paterfamilias of the the City’s audit office to talk about the past, present and future.
Q. How about your early years with the city?
A. I came in under what was known as the interim government. The transition government had to prepare a budget for the first year and all that sort of thing. I was hired as the assistant council auditor. The fellow that was appointed the council auditor [Gene McLeod] was a friend of mine. We had grown up together. When he got the job, he asked me if I would come join. So I looked around and thought, you know this is interesting, it’s a new government, a new city. I thought this would be a nice experiment. We worked together from 1968 to 1977. At that time, he was appointed finance director for the City and then I became the council auditor. I’ve been the auditor ever since — a long time.
Q. How have the councils changed over the years?
A. Well, we’ve streamlined a lot of processes. Early in the years, we would sometimes have budget sessions that would go all night long. That was not unusual. We would start in the afternoon and go until 6 o’clock to 7 o’clock the next morning. Back in those days, the Council was a fairly new group and they wanted to know everything about a budget. They wanted to know, ‘How many people do you have in this budget, what’s the purpose of every person? How many secretaries do you have? Do you need this many secretaries?’
Q. Did you uncover a lot of corruption in the late 60s and early 70s?
A. It was before consolidation, primarily. You had a lot of folks who were indicted in county government and city government. That spawned the Local Government Study Commission. They put a report together which recommended that we consolidate the government in light of all the problems we had with the city and the county. We did find a lot of remnants of some of the old system. One of the things that we did was payroll payoffs. Some of the folks only showed up on payday. They were employees of the old ward system of the old government. People were pretty frank with us after consolidation. We would go out to places like the highway yard. A guy would drive up and pick up his check and sign for it. We would ask what he did. They said he did nothing. I said, ‘You mean he only comes out here on payday?’ They’d say, ‘Yeah.’ I’d ask, ‘Well, don’t you question this?’ They’d say, ‘Well, we assumed this is the way it works.’
So little by little we’d begin to look at areas. We didn’t have a good inventory system. We didn’t know where a lot of the things were. We were being billed for telephones that were in long-since demolished buildings.
And then we had some major problems. We had major pollution of the river. We had a lots of little local water and sewer utilities and a lot of them just dumped right into the river. That was one of the things Mayor Hans Tanzler decided that was going to be a No. 1 deal to clean up. Fortunately for us, the Federal Government had passed a clean water act or something like that. They paid us 75 cents on the dollar to go out and to do capital. What we used it for was to go out and acquire a lot of these little utilities. That’s still continuing to today with the JEA still purchasing some of those systems.
It was a real trying time during the first period of consolidation. We combined the city and the county government. We had people in the city and the county that were doing the same job and getting paid at different levels. We had a lot of animosity between the old county employees and a lot of the city employees. If a city employee got named as a division chief, it would rankle the county.
Q. How many years did it take for the ripples to smooth?
A. Probably three years or so. We authorized some studies to try to equalize some pay. As far as animosity, I suspect some of that went on a long time. A lot of the constitutional officers bitterly fought consolidation. They would tell their own people if they consolidate they would lose their jobs.
As a matter of fact, the Clerk of the Court was Morgan Slaughter. Morgan never embraced it until the day he died. He was in probably 10 years after consolidation. He would have as little to do with us as he could. I’ll give you an example of what he would do. He would request people but he didn’t feel he had to give us any reason. He just wanted them. The Council would turn him down so he would go to the State to get a supplemental appropriation. He would hire a dozen employees and two years later the funding would run out and we would have to pick them up; they were civil service people. He never embraced it until the day he died.
Q. How are you involved with the budget process?
A. We are advisors to the Council and really reviewers of the budget itself. The budget of the City and the independent authorities are approved by City Council. So, they look to us to be their advisors. We’ll take each budget as presented. We’ll do a detailed analysis that shows what increases, where they are, increases in personnel, why the increases and so forth. Then we will present it to the Finance Committee in a series of meetings that they’ll have on the various budgets. We’ll make recommendations if we feel necessary. We primarily deal with the finances of it: where were we last year, where are we going next year. We are the official reviewers of the budget for the City Council.
Q. What is a typical point of concern in an audit?
A. One of the things that we’ve always harped on — we’re a relatively conservative department — is that we would like to be sure that the rainy day fund is sufficient. If you have an unusual occurrence that happens during the year, you’ve got money that you can look forward to doing it. We used to have $5 million in the rainy day account. We recommended at least five percent of the budget would be for the account. If you have a $600 million budget, five percent of that is $30 million. The Delaney administration has worked real hard to build that rainy day account up. It remains to be seen how he’ll do this year because I understand it’s going to be a tight year.
Also, sometimes we think that sales tax projections from the state are overly aggressive. We’ll express our concern about that. If you have $5 million overstated in your budget for sales tax revenue, that’s a $5 million hole.
Through the years it’s been an interesting operation. The budgets have grown tremendously, as you might expect. The first consolidated budget was about $300 million including the City and all the independent authorities. Now it’s $3.6 billion. Of course we’ve become much more sophisticated.
Q. What’s the primary responsibility of the Council Auditor?
A. Our main mission has always been audit.
Q. If you office was created by consolidation, who did the auditing before 1968?
A. There was no internal auditor before us. You had people who worked for the finance department who could do cash counts and things like that. But they weren’t independent auditors. The City itself never had an outside audit by an independent CPA firm until the late ‘60s. So when we came in we were an new entity. As a matter of fact, we got challenged in many cases. When we went in to do an audit, I’d present my credentials and there would be managers who would say, ‘We don’t think you have the authority to do this.’
Q. When was that?
A. Early days. Back in ‘69. They’d say we didn’t have the authority. I’d tell them to get on the phone and call the lawyers. Naturally, if I had been an administrator of a department or division or an independent authority for years and years and nobody looked over my shoulder, I’d kind of resent the fact that here’s an auditor who reports to the City Council. I have no control over him and he can come and audit me at his pleasure.
Q. Did you find a lot of messy accounting systems then?
A. Oh, yeah. You found antiquated accounting systems. You’d have rudimentary accounting systems. For instance, Duval Medical Center, which is now Shands Jacksonville, they never reported receivables. If you walked in that door, I don’t care who you were, you got free treatment. The hospital administrator said at that time, ‘We’re a county hospital. If you walk in my door, the county deserves to treat you and not charge you.’ They were just a cash operated basis. We found in lots of places where there was no control over cash collections. People would just collect money and not give receipts.
Q. Sounds like Mayberry, from the old Andy Griffith Show.
A. Oh, it was. As a matter of fact, one of the early pundits said, ‘You guys are going to look like heroes for a while because everywhere you look is going to be a mess.’
Q. How big is your staff?
A. We have a total of 16 but two of those are secretaries. So we have 14 auditors. Most of them are CPAs. We’ve always had a small audit shop and we’ve tried to do the best we can with the number of people we’ve got. Several years ago when the city got involved big time in economic development, our function as an aid to the council got so consuming that our audit began to lag. There were some areas out there that we should have been auditing but we didn’t have the people to do it. So we committed ourselves about three years ago to go back and do the audit function. We declared that the audit function was going to be sacrosanct and we weren’t going to pull people off on special projects. The TRUE Commission, in reviewing our audits, said they liked what we’re doing but would like us to do more. They made a recommendation to City Council that we increase our staff. The Council subcommittee has looked at it and they are recommending in this budget that we start increasing our staff.
Q. How many more do you need?
A. We’re going to start out by increasing with three.
Q. The Jacksonville Airport Authority has taken some heat for having lavish board retreats and planning to build a new building for its administrative offices. Are you looking into that?
A. We’re over at the airport right now doing some work on some audits that were started but never completed by their internal auditor. She got transferred out for some odd reason. We told the chairman, Ed Austin, and we told (airport director) John Clark that we needed to complete the audit. My guess is the audits are not going to be near as bad as we thought they were. It’s going to have some findings, there’s no question about it.
Q. You just look at the books, don’t you? Or do you look at the management style, too?
A. No, I don’t look at the management style but I look at the management decisions. In other words, your policies and procedures — what are they? If you don’t have them, we are highly concerned about an agency that doesn’t have complete policies and procedures that spell out everything. As far as management decisions, it’s hard for us to second guess a decision. You know the airport has had this big downturn in revenues. Yet they’ve got these grandiose plans about building this big tower out there for their administrative offices when they’ve got room to do it themselves. We’ll look at that.
Q. How many City departments do you audit?
A. We have audit rights in every department of the City — about 20 departments — and then we have all the independent authorities.
Q. Do you see any
ongoing fiscal problems?
A. The word we get is the budget is going to be tight this year. Even with some ad valorem increases, the budget is not going to be real plush this year at all. As far as the Better Jacksonville Plan, just from years and years of experience of looking at things, it’s not unusual for me to believe that even the best laid plans work out well. You’re going to have excess costs in a lot of these areas. For instance, when we got the Jaguars approved in 1993, we budgeted $8 million worth of drainage for everything outside the stadium. We spent $28 million.
Q. What’s your future?
A. I am 71 years old. I am going to retire June 30 next year. I’ve enjoyed it. I’ve told a lot of folks I could have retired several years ago. If I didn’t enjoy it, I would have retired. It’s been a challenge and it’s still a challenge. There are a lot of things about government that are repeats. We repeat the budget every year. We try to find ways to balance the budget and keep taxes down but there are still enough new challenges out there that keeps it interesting. But it’s time to hand the reins over.