PROVIDENCE, R.I. (WPRI) - The "dysfunctional financial management" of former Providence Mayor David Cicilline's administration "severely worsened" the city's problems after a severe recession and deep cuts in state aid, a report commissioned by the City Council has found.
Cicilline's team "did not honestly assess or address these fiscal challenges" before leaving office in January, Gary Sasse and Matt Clarkin write in the summary, which was obtained by WPRI.com. The pair briefed councilors and the Taveras administration on its contents Tuesday; the full report is scheduled to be released Wednesday morning.
The report faults the City Council for "deficiencies" in its oversight and monitoring of Providence's finances. Mayor Angel Taveras has said the city faces a "Category 5" financial emergency, with a budget shortfall projected at $139 million from now through the close of the fiscal year that ends June 30, 2012.
Cicilline declined to comment Tuesday on the specifics of the report ahead of its official release, but he has defended his stewardship of the city in recent weeks. "We made tough decisions that got us through some of the worst years of the recession," he wrote in a Providence Journal op-ed last weekend.
"Were Providence's finances hit by the recession? Of course," Cicilline wrote. "Despite all of our work to strengthen our city's financial position, strong external forces compelled us to take even more difficult actions," including "budget cuts, revenue enhancements, use of the rainy-day fund and strategic borrowing."
The City Council hired Sasse – who ran the Departments of Administration and Revenue under former Gov. Don Carcieri after a long tenure as head of the Rhode Island Public Expenditure Council – as a fiscal advisor in March. Clarkin is the city's internal auditor.
Their summary cites two of the same culprits Cicilline has blamed for Providence's financial problems – they write that a 19 percent cut in state aid since 2008 and the recession "had a dramatic impact on the financial health of the city." But they argue decisions made by his administration made a bad situation worse.
The cash balance in the city's three largest reserve accounts fell 89 percent over the last two and a half years, from $70 million in June 2008 to about $8 million as of last month, according to the summary.
"These funds were transferred from both accounts without approval of the City Council as required in Section 810 of the City Charter," the report says.
Last year, Providence failed to complete its annual financial audit by Dec. 31 – as required by state and local law – "for the first time in more than a decade," according to the report.
Sasse and Clarkin say the city's outside auditor, Braver Associates, "believed [the Cicilline administration] did not place a high priority on completing the audit within the deadline required by law."
The Cicilline administration also failed to submit four of the nine budget documents required by the City Charter for this fiscal year, according to the summary.
Sasse and Clarkin offer a number of suggestions for improving management of Providence's finances going forward. Those include mandating a minimum level for its rainy-day fund; establishing an audit committee; ensuring mayors submit all nine required budget documents; and requiring monthly and quarter analyses of budgets and cash flow.
Eyewitness News reporter Tim White contributed to this report.
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