Chancellor Bling-Bling - Page 2

City College of San Francisco paid Phil Day a huge salary but refused to fund an auditor who may have stopped the illegal diversion of public funds
Illustration by Chad Crowe

24 meeting.

Outside auditors inspect the school's books annually as required by law to make sure it's following the rules of basic money management, a limited review compared to what an internal auditor, working full-time for the district, might check.

The Guardian reviewed the school's annual outside audits going back several years and discovered that each of the reports between 1998 and 2003 advised the school to hire someone to do the job year-round internally.

"Regular internal audits enable timely detection of accounting inconsistencies and deviations from established policies and procedures," the reports state year after year. But each year the inspectors found anew that their recommendations were "not implemented."

Regarding the headline-grabbing mess that began when two school bureaucrats in separate instances illegally diverted public funds to a campaign committee, Churchwell said its causes were mistakes due more to ignorance than knowing attempts to break the law.

"It's almost like lightning striking twice," Churchwell told the school.

But now it appears the storm might have been averted if Day and others in his administration had listened to the school's outside auditors 10 years ago. Churchwell concluded that an internal auditor might have immediately caught election law violations but without one "no one person has a firm grasp on all the accounts that are open, what they are used for, or who can deposit checks into them," leading to a "glaring lack of oversight of the college's involvement in fundraising from college contractors."

Day didn't respond to requests for comment, nor did trustees Lawrence Wong or Anita Grier. But vice chancellor Peter Goldstein argued that the school would set the agenda for an internal auditor, so such a person might focus on how the district reports student attendance or manages financial aid, not necessarily on accounts receivable.

"My response would be that this is a very large and complicated institution from several different perspectives, including the financial one," Goldstein told the Guardian. "While no single person may have a complete understanding of every single account, I believe that we have enough professional staff at the right level with the right background over all the accounts."

It could be that like many bureaucrats, Day is threatened by the possibility of an efficiency expert roaming the school's halls and compromising the administration's control over its bank accounts. But Day complained at the Jan. 24 meeting that City College just didn't have the resources to hire an internal auditor, even though auditors often find enough ways to reduce wasteful spending that they cover their own expense and much more.

Not to mention that if Day had earned as much in compensation as his equivalent in Los Angeles, City College would have had about $100,000 left over for an internal auditor. A district report from 2000 even concluded that an internal auditor at that time would have cost about $105,000.

Two vice chancellors implicated in the election law violations, James Blomquist and Stephen Herman, earned about $200,000 and $170,000 respectively during the 2007 calendar year, compensation figures obtained by the Guardian through a records request.

Blomquist worked as a regular consultant to the school before earning $175,000 his first full year as a City College administrator in 2005. His firm, Blomquist Consultancy, made $401,074 from the college between April 2002 and May 2004, records show.

As for Day, his largest pay increase came after the 2005 bond election, when he was given an 18 percent raise for the 2006 calendar year.

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