By Michael E. Miller
By Allie Conti
By David Villano
By Jose D. Duran
By Michael E. Miller
By Allie Conti
By Kyle Swenson
By Luther Campbell
Victor Igwe's job used to be a joke. Just the idea of taking his job cracked him up. Igwe runs the City of Miami's Office of Internal Audits, a leadership position that was forever advertised, to many chuckles and very few takers, in the trade magazines circulated among certified public accountants.
"The ad had been around for a long time," Igwe recalls. "My colleagues and I would just look at it and laugh and say, “Who wants to go down there?'"
Igwe certainly didn't. He'd been working as a government auditor in Palm Beach County, a stable job with a professional staff committed to clean government. While the ad quietly circulated in the trades, Miami was suffering through so much financial turmoil that the governor had placed the city under state control. City managers washed out quicker than a ketchup stain. And the turmoil was nothing new: Years earlier the Office of Internal Audits had been exposed as a corrupt bastion of nepotism. The idea of voluntarily entering this miasma held little appeal for Igwe. Still he began getting calls from recruiters.
"The first time they contacted me I said no way," he affirms. Eventually, though, he was persuaded to take the challenge. And he has proven himself up to that challenge. In less than two years on the job, Igwe (pronounced E-gway) has transformed the audit office into an efficient department of muckrakers. He and his staff have identified approximately $30.7 million owed to the city, and have prompted the collection of more than $1 million of that debt already. He has earned for himself a reputation as a thoroughly professional bureaucrat who is independent, honest, and passionate about cleaning up corruption in the city. His job is a joke no more.
"He's doing a very good job," affirms Miami City Manager Carlos Gimenez. "It's the first time in a long time that the city has had a professional audit department."
"I think Victor's a tremendous person for the city to have, and I think he's doing a great job," reports Joy Intriago, a CPA and a member of a volunteer citizen advisory committee that works with the audit department. "I don't know anyone who can say anything bad about him. And that's very unusual in the City of Miami."
Igwe is 49 years old. His soft voice reflects his Nigerian heritage and his London upbringing, but perhaps thankfully, none of his higher education, on scholarship, in Houston, Texas. In addition to being a CPA (the last two directors of the audit department did not have that distinction), he's also been certified as an internal auditor and holds a doctorate in business administration. Brushing a hand across the lapels of gray pinstripe suit during an interview in the seventh-floor conference room at Riverside Center, he expands upon his passion to root out corruption.
"We in the public service are caretakers," he explains. "It's my job to make sure nobody's taking advantage of the caretaker position to enrich themselves. That's one reason why I decided to become an auditor. I believe that people should be held to the highest degree of discipline and accountability. An auditor always wants to see if a system is working the way it's supposed to."
When he first arrived at the city, though, even his own department wasn't working like it was supposed to. Audits in the classical sense were not being conducted. The city's auditors were tracking revenue, but they didn't even have an audit plan, a master list of the projects they were working on ranked by importance. Furthermore previous directors had forested the department with deadwood
Igwe made changes. First he clear-cut the deadwood, transferring highly paid senior personnel elsewhere in the city and replacing them with young auditors he could train to do things his way. All his auditors have CPAs, which heretofore was unheard of in Miami. "They all go to continuing professional classes. I purchased laptops for them. I went out and got an EDP auditor -- electronic data processing -- because 90 percent of financial transactions go through computers, so now we're better equipped to examine computer transactions."
He and his staff of eight churned out seventeen audits in their first fiscal year, a very high production. The reports are uniformly well organized, easy to read, and often damning in their evidence. Findings range from nickel-and-dime scams to massive fiscal oversights. Among them:•The city-funded Overtown Community Optimist Club spent $190,000 without properly accounting for it.
•A city police officer was paid $42,938 for court overtime, in addition to his regular salary of $43,431.
•The Bayfront Park Trust had been spending tens of thousands of dollars on undocumented concert tickets, meals, and cash payouts to its director. Because of personnel and other changes made in response to the audit, the historically indebted trust now operates with a surplus.
City officials generally have been responsive to Igwe's audits. Department heads review his reports, and when they agree with the findings, steps are taken to ensure that problems do not happen again. Igwe regularly follows up his audits with reports analyzing how well the corrections have taken hold.
"We take it serious," Manager Gimenez says of the audit findings. "Sometimes people don't like what he's saying, but it's always better to have the knowledge. Sometimes I send him on expedition trips myself, maybe having him take a look at a contract to make sure the city is getting all the money it is supposed to."
Following the money is the mission of the department, Igwe says. Suggestions on what money to follow come from different sources: city officials like Gimenez, workers, anonymous tipsters, letter writers, even newspaper stories, such as the Miami Herald's examination of former city Manager Donald Warshaw's Do The Right Thing charity. Igwe confirmed the printed allegations of wanton misspending even though Warshaw was the man who had hired him.
"When I took the job, that was one condition that I gave," Igwe recalls. "I asked him: “Am I going to be free to do my risk analysis and my audits?' He told me I can do whatever audits I want. If I had gotten any other indication, if I had gotten any message that I can't do what I want to do, I wouldn't have come to Miami in the first place. I wanted to be independent. So far nobody's ever told me what to put or not put in a report. I wouldn't stand for it."
Although he is a department director, free to attend meetings and sign off on his staff reports, Igwe continues to work directly in some way on every audit he approves. The cost to him is twelve- and thirteen-hour days. The payoff to the city, though, can be immense. In one of his department's more significant audits (the city's long-distance telephone contract), Igwe discovered that the city had overpaid provider MCI more than $400,000 from 1992 to 2000. The city is seeking a refund.
"Nobody actually looked at the contract to see what MCI had promised to deliver and what they were actually charging the city," says Igwe. "I was looking at the phone bills provided by each department head, and then I looked at the minutes used. I divided it and determined it was 27 cents a minute. I said, “Gee, I pay ten cents a minute at home.'
"I think we made a difference," he concludes.
Victor Igwe's Greatest Hits
In one year on the job, from October 1, 1998, through September 30, 1999, Victor Igwe and his auditors identified more than $1.1 million in additional revenue due the City of Miami, almost all of which subsequently was collected. Organizations audited ranged from the huge multinational supplier of the city's computers to a local day care that received a modest city grant. Igwe's audits revealed the following:
Unisys Corporation: An audit of the city's computer provider found a total of $649,695 in duplicate payments, overpayment, and other credits were made to Unisys in error by the city's finance department. Unisys granted the city credit for the full amount. Furthermore payments totaling $6.3 million had been processed and paid either without supporting invoices, purchase orders, or other pertinent source documents.
Kimmins Recycling Corporation: An audit of the waste hauler determined that additional fees totaling $187,368 were owed the city. This amount has been collected.
United Environmental Services of South Florida, Inc.: An audit of the waste hauler determined that additional fees totaling $1140 were owed the city. This amount has been collected.
Catering by David Lynn, Inc.: The audit of the concessionaire for all events held at the Orange Bowl determined that additional revenues totaling $13,161 were due the city. Catering by David Lynn continued to operate under an agreement that had expired. The concessionaire subleased its concession privileges to another vendor without the required written consent of the city, failed to provide the city a certified financial statement, failed to provide a report on inventory shrinkage, and did not account for total gross receipts in a separate bank account, all as required by the agreement.
Waste Management of Dade County, Inc.: An audit of the waste hauler determined that additional fees $235,542.77 were due the City. An agreement for $107,653 settlement was reached between the city and WMDC. This amount has been recovered.
International Trade Board-Hemispheric Health Ministers Conference: An audit disclosed that the conference sustained a loss of $20,682. This finding contradicts the conference's financial report, which reflects $7500 in revenues and $7500 in expenses. Documents supporting revenues, expenditures, and other transactions were not retained on file by the International Trade Board for postaudit.
Environmental Waste Systems, Inc.: An audit of the waste hauler determined that additional fees totaling $26,743 were due the city. This amount has been recovered.
Haitian American Foundation, Inc.: An audit revealed numerous internal-control weaknesses that led to the community development department suspending funding to the agency.
Petty Cash and Working Funds: Surprise cash verifications were performed over a three-month period. An audit disclosed petty cash and change-fund shortages totaling $218.71. The city has been reimbursed.
Globe Facility Services, Inc.: An audit of the city's convention center operator noted that GFSI was advanced a total of $127,997 in excess of the actual expenditures incurred. GFSI reimbursed the city.