Lally defends himself against critics
This letter is in response to Dr. Evelyn Hovanec’s recent letter to the editor.
As controller, I will only address the issues that I am familiar with and have actively participated in. Several statements were made that are not factual and are political volleys designed to distort facts and present a sentiment that benefits one person and their ideologies.
For clarification, the new software that Dr. Hovanec spoke of is a necessary part of running any business and especially one that has an operating budget of $26.5 million.
First, the software that was purchased had a total cost of $363,000 and is amortized over five years. Second, an additional $100,000 was allocated for much needed IT improvements, regardless if a new or current system is in place.
For the record, our county did have a software system in use for many years. This system was set to expire on Dec. 31, 2012. It, as all systems do, had a cost to upgrade. This cost was $250,000 over three years and an additional $14,000 to add signatures to our checks. The current system is in a Linux format and in no way had the ability to do the things that our new system can and will do. To disseminate false information serves no purpose and diminishes one’s credibility.
I would also like to discuss managerial fees for our pension consultant. This is part of a complete cost which is approximately $300,000 a year which is broken down into managerial fees, custodial fees, consultant fees and administrative costs. Our new consultant, as all money managers, works off of basis points or percentage fees based on the aggregate value of the fund.
At our current valuation, our consultant’s fee will be approximately $100,000. In their new role, they have negotiated a basis point reduction from 45 BP to 31 BP, with our managers, that will save us approximately $73,000. Their increased fees correspond directly to the services provided. Our county will be receiving an asset liability study which is formulated in conjunction with our actuary. This study is valued at $25,000 to $35,000, which is a service being provided free of charge.
Your opinion also wandered in the direction of our prison. Most prisons do have a business manager. The need for this position is never more evident than here in Fayette County. My office has been monitoring and or auditing the prison since 2009.
With each visit, my staff found another issue that needed addressed. I will highlight some of the major issues here. One, in 2009, a discretionary spending account was discovered that completely circumvented the commissioners and allowed management to spend freely from it. When it was closed $79,000 was transferred to our general fund.
Two, upon the first audit, my auditors were handed a box of unopened bank statements for two and a half years. How was anyone supposed to recreate and or monitor spending without reconciled statements?
Finally, and most current, I discovered that meals to staff were being given out at a cost of $28,240.48 to the taxpayers.
As you do not support a manager, pension fund consultant and/or modern accounting software, what suggestions do you offer? Should things stay the same and a prison that uses 23.8 percent or $5,800,000 annually of our budget be allowed to self manage?
Is it acceptable to spend $250,000 over three years for software that is antiquated and will not allow county wide implementation? Being that you offer no solutions, I will answer for you. I do not believe taxpayers would want a prison to be mismanaged, nor do I believe that they think using abacuses and slide rules is an acceptable means of mathematical accuracy.
I also would like to remind you there is a big difference between fact and supposition, especially when the supposed truths are not to benefit anyone but are merely an attempt to discredit others, most notably those in the majority.