Owens moves to fix ledger

In wake of audit, a bid to resurrect comptroller's office

March 19, 2000|By Scott Calvert | Scott Calvert,SUN STAFF

Responding to a stinging independent audit of Anne Arundel County's 1999 finances, County Executive Janet S. Owens announced Friday that she plans to re-establish a separate comptroller's office and hire two additional accountants to improve recordkeeping.

To bolster the county's financial management team, she has also tapped former state banking commissioner H. Robert Hergenroeder to be assistant chief administrative officer for $71,000 a year. Owens said Hergenroeder's appointment was indirectly related to the audit and had been in the works for a while.

Owens also said County Attorney Linda M. Schuett will examine the "functionality" of the county's new One World financial computing system and explore whether the county is due a refund. The system is on pace to exceed cost projections by $400,000 and has been linked to problems cited by auditors from the accounting firm Arthur Andersen.

The two companies working on the county's One World system say that though there have been bumps in the transition, problems haven't been out of the ordinary.

In another audit-related matter, John R. Hammond, county financial officer, said his staff has cleared up most of an $11 million discrepancy in purchasing accounts, determining that the county does not owe the money, as had been thought possible. The gap was among the biggest questions raised by the audit, released Tuesday.

By reacting quickly to the audit, Owens said, she hopes to reassure the public and the County Council as work on the 2000-2001 budget moves into high gear. Council members greeted the report Tuesday with frustration and questions about the reliability of administration figures.

"The county is in solid financial shape," Owens said. "But this audit has raised questions that must be answered."

Owens said she does not know whom she will name comptroller, assuming the County Council approves creation of the office. Assistant Financial Officer Alfred F. Warfield oversees financial recordkeeping, under Hammond's supervision. The comptroller's duties were merged with the budget office in the early 1990s as a cost-cutting move by then-County Executive Robert R. Neall. Owens said budget and accounting functions should be separate.

Council Chairman Daniel E. Klosterman Jr. praised the proposed realignment as "a quick and decisive move."

Under grilling by council members Tuesday, Warfield attributed the poor audit results largely to staffing shortages and problems with One World. Though many flaws noted by auditors are procedural -- the failure to track cash properly, for example -- others dated to installation of One World in May.

In one case, computer glitches caused the county to lose track of several million dollars in orders for goods and services, the county maintains. As a result, budget officials have had to estimate how much is owed vendors, setting a range of $2 million to $7 million. This is separate from the $11 million discrepancy, which Hammond blamed on human error.

There are lingering computer problems, Hammond said. Departments still have a hard time tracking their spending with One World and posting change orders for projects.

Recently, Hammond swapped "war stories" in Annapolis with officials from Orlando, Fla., and Danbury, Conn., both of which purchased One World from Denver-based J. D. Edwards and have had problems. All were among the first governments to buy the software.

Chris Houston of J. D. Edwards denied that the company's software contributed to the poor audit and said glitches have been no worse than with "any other software product."

"We're an easy culprit here," Houston said.

When Anne Arundel selected J. D. Edwards in late 1997 to replace its antiquated computer system, the county expected to spend between $6 million and $8 million by the end of 2002. The county has spent $6.9 million, Hammond said, and is on track to spend $8.4 million through 2002. The additional $1.5 million is budgeted for software and equipment licensing.

Hammond said trouble with One World forced the county to hire Richard Eisner Associates Inc. to help IBM, a partner of J. D. Edwards, in the installation. Eisner's bill to the county has reached $1 million.

"I've mentioned to both IBM and Edwards people I wasn't satisfied that what was promised in the product has actually been delivered," Hammond said.

IBM officials say the installation -- which included modifying other county computer systems so they could communicate with One World -- is nearly complete. And though there have been glitches, they say that is common with large-scale systems.

"This was a very complex project, further complicated by the newness of the software and the fact that a lot of the systems were not automated," company spokeswoman Sue Hoffman said.

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