Criminal Conspiracy or Government Accounting

The 2012 Union County audit is finally out and Note 15 on OPEBs is garbage.  I go into some detail on that item below* but let’s examine the stakeholders that maintain this dysfunctional system of reporting where any number will suffice and no one has an interest in truths that may turn out to be inconvenient:

Accountants: Imbue a simple subject with jargon to make work for your profession leaving only ‘experts’ able to understand what the numbers really mean and everyone else to pretend to know.

Actuaries: Brown & Brown got $20,000 in 2009 for a rehash of the county plan and one spreadsheet that the county has been using ever since recasting projections as reality.

Rating Agencies: When Union County went into the bond market a rating agency reviewer asked about OPEB costs and got a one paragraph email with junk numbers.  AAA+ rating came a few weeks later and two checks for $20,000 went to the rating agency shortly thereafter.

Municipal Bond Buyers: Assuming that taxpayers will always pay the tab, however high, so why worry if a locality is reporting that they have $23 million in a trust that doesn’t exist or that their Net OPEB Obligation is $35 million when it is closer to ten times that amount?  We’re not dealing with a Detroit situation…….yet.

Politicians in Office: Who didn’t get where they are by asking questions that could threaten the income of campaign donors.

Taxpayers: Seeing their jobs as done after casting their ignorant votes and expecting the puppets they anoint to watch out for them.

Local Finance Board: Rubber-stampers facilitating thefts through providing the appearance of regulation.

Public employees: If honest costs were reported to taxpayers would they really be getting those benefits?

Unfortunately that covers pretty much everybody.  We’re all in on it.

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* GASB rules forced Union County to do an OPEB valuation beginning in 2007 so they hired Brown & Brown for $20,000 for which they got a spreadsheet of projections that they have been using ever since reporting as if those projections were EXACTLY realized.  For example, the county asserts that they have $22,995,000 in assets as of 12/31/12 because that was what Brown & Brown projected there would be back in 2009 based on 2007 data.  However, the one number that the county accountants didn’t pull off from the Brown & Brown spreadsheet was the Net OPEB Obligation (NOO) which was projected to be $211,117,000 as of 12/31/12 (of course not including the 2011 OPEB giveaway) but in the relevant page from the 2012 audit the NOO is reported as being $35,263,000, which happens to be the one-year difference between what was projected to be the ARC and what was projected to be the OPEB cost for the year in that 2009 Brown & Brown report.  Basically the county auditors could have picked up the page numbers from the Brown & Brown report for their disclosures and nobody would have been the wiser.

11 responses to this post.

  1. Posted by Thomas Foregger on September 26, 2013 at 12:02 pm

    John, with regard to the spreadsheet, do you have the actual spreadsheet in Excel? and do you have copies of any investment account statements that show the actual assets? tom

    Reply

  2. Posted by Endalimony4ever on September 26, 2013 at 12:47 pm

    John, Just want to say thank you for doing this work and keeping Union County government accountable. The work you do is important and appreciated!

    Reply

  3. Posted by Tough Love on September 27, 2013 at 1:00 am

    With the percentage of Public Sector workers (and their family members) who vote so high, and the percentage of NON-Public-Sector workers who vote so low, I wonder whether we have already reached the tipping point where change (short of insolvency) is no longer possible.

    Reply

    • Posted by Tough Love on September 27, 2013 at 2:09 pm

      That article is a load of crap. The real thievery is the grossly excessive pensions (unnecessary and unfair to Taxpayers) that the Public Sector Unions have been granted via the elected officials bought-off with campaign contributions and election support.

      The Taxpayers have been financially “mugged” to pay for this excess for decades, and now the Unions want Taxpayers to pony up much MORE to top-up the huge shortfalls, mostly the result of intentionally understating the true cost of these VERY generous promises.

      In my opinion … it it eminently reasonable and appropriate for taxpayers to demand reform and REFUSE to pay for this well-organized thievery.

      Reply

  4. Yes, its a load of crap. i was just pointing out the spin as an FYI.

    Reply

  5. […] nation even as massive amounts of debt are being piled up, trust funds are being misappropriated, OPEB obligations are being fraudulently reported, and municipalities are desperate to secede.  So where does freeholder Vice-Chairman Christopher […]

    Reply

  6. […] nation even as massive amounts of debt are being piled up, trust funds are being misappropriated, OPEB obligations are being fraudulently reported, and municipalities are desperate to secede. So where does freeholder Vice-Chairman Christopher […]

    Reply

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