Mayor John Whitmire
A sweeping study of Houston’s 22 departments, their finances and operations revealed potential misuse of city credit cards and a pressing need to streamline city government to make it more efficient, according to an executive summary obtained by the Houston Chronicle.
The review, conducted by the accounting firm Ernst & Young, pinpointed long-standing problems with the city’s outdated organizational structure and contracting procedures.
About 42% of city managers only have one to three people who report to them, the analysis shows, and the city has challenges with pay equity and competitive compensation. The firm’s report also notes that career pathways gaps created opportunities for “fake promotions” of employees into management roles that didn’t oversee anyone.
Authorized city employees can obtain purchasing cards, or “p-cards,” that essentially act the same way as a corporate credit card so they can make purchases for city business. The review found that p-card payments were split to allow for larger purchases that would have typically been over spending limits, and that some items were purchased from unauthorized vendors.
“This assessment confirms what many of us already knew: We have work to do to build a government that truly earns the trust of its residents,” Mayor John Whitmire wrote in a memo to city council members Tuesday.
He continued: “I believe that by acting on these findings, we can create a city government that is more transparent, efficient and focused on delivering results. We can show Houstonians that their government works for them and that every decision we make is rooted in accountability and service.”
City officials have been waiting for the results of the financial overview since it was commissioned in May 2024. The mayor’s office sent a summary of the results to council members Tuesday, and said it was a “critical first step” in restoring public trust in city government.
The study showed a need for improvements in four main categories over the course of six weeks: performance and accountability, operations and efficiency, spending and procurement, and financial controls and risks.
The report is here – it’s quite long and gets very much into the weeds of how departments can and should operate, so unless this really floats your boat I’d just stick to the Mayor’s letter and executive summary. At a high level, I’m fine with the recommendations, and I’m sure there are plenty of things the city could do better. I say go for it, within reason and the collective bargaining agreement with the municipal union.
But the thing that stood out to me, especially after months of talk about how this audit will help save the city’s bacon on the budget, I didn’t see a single dollar amount listed for the savings that we could get if this plan were fully implemented. Not even some aspirational pie-in-the-sky number that no one will believe. So I have to ask, is that all there is? As I’ve said, I’m sure there’s some savings to be had, just not “make a big dent in the current deficit”-level savings. What does Mayor Whitmire think this will do for the city’s budget? Because he’s going to have to put a budget out real soon now, and that’s when it all gets real.
UPDATE: The Houston Landing story has some theoretical numbers.
Mayor John Whitmire on Wednesday lauded the results of a long-awaited efficiency study that found potential mismanagement of funds among city departments and a lack of accountability measures, but how much money the city could save remained unknown.
The mayor’s team presented the findings of the Ernst and Young study at City Council and identified duplicative contracts, a lack of accountability in department spending and redundancy in departments as opportunities for change.
Specific savings, however, largely will stay unidentified until Whitmire unveils his budget proposal in the spring.
In the meantime, Whitmire said the administration plans to offer the firm another contract to help find solutions.
Whitmire’s executive team said the bulk of savings is estimated to be between 5 and 15 percent of Houston’s $2.2 billion facilities and construction budget. That represents an estimated savings of $113 million to $341 million.
Whitmire repeatedly has pointed to the report as his reason to reject calls for a property tax rate increase or the implementation of new fees. He said Wednesday he would see through the auditing process before asking taxpayers to contribute more money to close Houston’s growing $330 million deficit – which could be further impacted by ongoing negotiations with the Houston Police Officers Union.
“It is so revealing why Houstonians are frustrated and why I will not go to them and ask for additional resources, until, in my judgment, regain their confidence that we’re using their money wisely,” the mayor said.
The efficiency study examined 22 city departments, including police and fire, and focused on performance, organization, spending and forensic accounting. Ernst and Young is completing a similar audit of Houston’s tax increment reinvestment zones.
Well those are definitely numbers. I’m not sure where they came from – as noted, there are no numbers cited in either the mayor’s letter at the beginning or the executive summary – and I’m not sure why the facilities and construction budget is being used as the benchmark, as that doesn’t seem to be tied to the things that are identified as areas of improvement. The way these things tend to go, expect the lower end to be much more likely than the upper end to be realistic, and while that’s a substantial number it’s still a ways off from being sufficient to close the deficit on its own. The budget will tell the story of how this might be achieved and how painful it will be. Emily Hynds has notes from the Council meeting where this was discussed if you want more.
As a guv’ment employee and numbers crunching guy, I love seeing statements like “Whitmire’s executive team said the bulk of savings is estimated to be between 5 and 15 percent of Houston’s $2.2 billion facilities and construction budget. That represents an estimated savings of $113 million to $341 million.”
So… it’s either this amount, or three times this amount ? Imagine you were in the market to buy a new truck, and the salesman told you “…it’s gonna cost you $40,000 or $120,000 – we just don’t know at this point.”