#  Rose-Colored Glasses Fail Pasadena

     Details    Paul Hatfield   ![logo](https://www.citywatchla.com//templates/ja_teline_v/images/logo.png)         January 08 2015       [ARCHIVE](https://www.citywatchla.com/archive)   - [  Previous Article **Density Bonus Law … City Hall’s Hidden Nightmare** ](https://www.citywatchla.com/index.php?option=com_content&view=article&id=8168:density-bonus-law-city-hall-s-hidden-nightmare&catid=16)
- [  Next Article **Why Not Let People Vote for Whomever They Want?** ](https://www.citywatchla.com/index.php?option=com_content&view=article&id=8170:why-not-let-people-vote-for-whomever-they-want&catid=16)

  ###### Typography

- [](# "Smaller Font")  ****Smaller** **Small** **Medium** **Big** **Bigger****  [](# "Bigger Font")
- [](# "Previous Font Style")  ****Default** **Helvetica** **Segoe** **Georgia** **Times****  [](# "Next Font Style")

- [ Reading Mode](# "Reading Mode")

> <a class="a2a_button_facebook"></a><a class="a2a_button_twitter"></a><a class="a2a_button_email"></a><a class="a2a_button_print"></a>[](https://www.addtoany.com/share)
>
> ![](https://www.citywatchla.com/images/stories/Jan-2015/03f.png)PERSPECTIVE-A city with $1.8 billion of assets and no internal audit manager since 2011.
>
> Is anyone surprised that an independent audit report has uncovered everything from sloppy accounting practices to outright fraud?
>
> [It was recently reported that an employee with Pasadena’s Public Works department had siphoned $6.4 million over the last 11 years](http://www.pasadenastarnews.com/general-news/20141231/ex-pasadena-employee-alleged-accomplices-deny-involvement-in-6m-embezzlement-case). But his methods are what made the fraud more shocking than even the amount of his take.
>
> Preparing fake invoices, altering check amounts and bypassing approval policies are as blatant techniques as a white collar criminal can use. Only in an environment where management incompetence is the norm can this occur, as long as it did and with the degree of damage.
>
> Whenever I read about financial problems, fraud or waste in a government entity, I first look at its financial statements to get a sense of the scope with respect to the size of the organization and its components.
>
> Pasadena is structurally much smaller than Los Angeles and quieter, but its finances are definitely not minor league. The Fiscal Year 2013 Comprehensive Annual Financial Report (CAFR) has assets at $1.8 billion and revenue of $626 million. Not to digress, but over $100 million of pension bonds are on the books. That is over 10% of the city’s long-term debt. [$65 million of that was issued in 2011 to plug a funding gap that would have threatened the city’s solvency.](http://www.pasadenastarnews.com/general-news/20110329/pasadena-bails-out-pension-plan) This is an indication that the city may not have the brightest bulbs in the ceiling managing fiscal matters.
>
> It’s a large enough bureaucracy to allow wiggle room for an unscrupulous employee in the right position to navigate and bypass procedures. But for eleven years?
>
> ![](https://www.citywatchla.com/images/stories/Jan-2015/03e.png)The perpetrator, Danny Wooten (photo), was hired in 2002 and held positions with payment authorization delegations. According to the Pasadena Star News’s article, he had a criminal record and several run-ins with his supervisors. Not the type of person you want around a checkbook, yet no one at City Hall seemed to care. It didn’t seem to bother officials to leave the internal audit post vacant either.
>
> Pasadena, as Los Angeles, has a host of special funds, including the one Wooten controlled. These funds are like cells, with limited oversight. You will recall that [a Los Angeles special transportation fund accumulated $43 million over 17 years](http://articles.latimes.com/2013/may/14/local/la-me-ln-oversight-special-funds-20130514), completely unnoticed by former controllers Wendy Greuel and Laura Chick. The DWP Joint Trusts accumulated $13 million over 10 years without attracting attention from management-appointed trustees such as Ron Nichols.
>
> City Manager Michael Beck’s job is on the line, as it should, but nothing short of his immediate dismissal – without pay – should be tolerated by the residents.
>
> After the District Attorney completes an investigation, a recall effort would seem to be in order for the mayor and certain members of the City Council, mainly those on the finance committee.
>
> Other culprits will be uncovered, some will fit the category of unwitting. Regardless, they will have to go in order to send a message to others to take their jobs seriously.
>
> Lastly, the outside accounting firm of Brown Armstrong should be replaced and a complaint filed with the State Board of Accountancy.
>
> As part of its audit, the firm should have conducted a review of internal controls and tested the degree of compliance. Separation of duties appears to be one policy you could have driven a Rose parade float through. Did Brown Armstrong even look at the bank reconciliations for Public Works?
>
> All of this points to the potential for waste, fraud and abuse above and beyond Wooten’s scheme.
>
> Like the scandal at Bell, this story has legs.
>
> ***(Paul Hatfield is a CPA*** ***and former NC Valley Village board member and treasurer******. He blogs at Village to Village and contributes to CityWatch. He can be reached at: <phinnoho@aol.com>)***
>
> **–cw**
>
> **CityWatch**
>
> **Vol 12 Issue 3**
>
> **Pub: Jan 9, 2015**

  - [  Previous Article **Density Bonus Law … City Hall’s Hidden Nightmare** ](https://www.citywatchla.com/index.php?option=com_content&view=article&id=8168:density-bonus-law-city-hall-s-hidden-nightmare&catid=16)
- [  Next Article **Why Not Let People Vote for Whomever They Want?** ](https://www.citywatchla.com/index.php?option=com_content&view=article&id=8170:why-not-let-people-vote-for-whomever-they-want&catid=16)
<div data-id="1" 
	class="eb-inst eb-hide eb-emailform eb-1 eboxContentLocker"
	data-options='{"trigger":"onPageLoad","trigger_selector":"","delay":3000,"early_trigger":true,"scroll_depth":"percentage","scroll_depth_value":80,"firing_frequency":1,"reverse_scroll_close":true,"threshold":0,"close_out_viewport":false,"exit_timer":1000,"idle_time":10000,"close_on_esc":false,"animation_open":"slideInDown","animation_close":"fadeOutDown","animation_duration":400,"disable_page_scroll":true,"test_mode":false,"debug":false,"ga_tracking":true,"ga_tracking_id":"G-P16BQ7X1SW","ga_tracking_event_category":"EngageBox","ga_tracking_event_label":"Box #1 - Global Email Signup Form","auto_focus":false}'
	data-type='popup'
	>

	<button type="button" data-ebox-cmd="close" class="eb-close placement-outside" aria-label="Close">
	<img alt="close popup button" />
	<span aria-hidden="true">&times;</span>
</button>
	<div class="eb-dialog eb-formVer" role="dialog" aria-modal="true" id="dialog1" aria-label="dialog1">
		
		<button type="button" data-ebox-cmd="close" class="eb-close placement-inside" aria-label="Close">
	<img alt="close popup button" />
	<span aria-hidden="true">&times;</span>
</button>	
		<div class="eb-container">
						<div class="eb-content">
				
<form action="https://citywatchla.us2.list-manage.com/subscribe/post?u=34d69f33624fd058ee9b56516&amp;id=4bfa422f51&amp;f_id=00d6c2e1f0" class="eb" method="post" id="mcform-1" name="mcform-1" target="_blank">
			<div class="eb-form-header"><p><img src="/images/2023/06/be-a-city-watcher.png" alt="be a city watcher" width="350" height="97" loading="lazy" data-path="local-images:/2023/06/be-a-city-watcher.png"></p>
<p>Sign up to receive our special e-news blasts on Monday and Thursday evenings!</p></div>
	
					<div class="eb-field-row">

			
			
			
			<input class="eb-input" type="email" name="EMAIL"  placeholder="Email address"  id="EMAIL" value="" required>

			
		</div>
										
	<div class="eb-footer">
    	<button class="eb-btn" type="submit" name="subscribe" style="background-color:rgba(93, 183, 93, 1);color:rgba(255, 255, 255, 1)">
    		Sign up    	</button>
    </div>
</form>			</div>
		</div>
	</div>	
</div>
<div data-id="3" 
	class="eb-inst eb-hide eb-yesno eb-3 "
	data-options='{"trigger":"onScrollDepth","trigger_selector":"","delay":0,"early_trigger":false,"scroll_depth":"percentage","scroll_depth_value":80,"firing_frequency":2,"reverse_scroll_close":false,"threshold":0,"close_out_viewport":false,"exit_timer":1000,"idle_time":1000,"close_on_esc":false,"animation_open":"fadeInUp","animation_close":"fadeOut","animation_duration":300,"disable_page_scroll":false,"test_mode":false,"debug":false,"ga_tracking":true,"ga_tracking_id":"G-P16BQ7X1SW","ga_tracking_event_category":"EngageBox","ga_tracking_event_label":"Box #3 - Yes \/ No Donation Popup Box","auto_focus":false}'
	data-type='popup'
	>

	<button type="button" data-ebox-cmd="close" class="eb-close placement-outside" aria-label="Close">
	<img alt="close popup button" />
	<span aria-hidden="true">&times;</span>
</button>
	<div class="eb-dialog " role="dialog" aria-modal="true" id="dialog3" aria-label="dialog3">
		
		<button type="button" data-ebox-cmd="close" class="eb-close placement-inside" aria-label="Close">
	<img alt="close popup button" />
	<span aria-hidden="true">&times;</span>
</button>	
		<div class="eb-container">
						<div class="eb-content">
				
<div class="ebox-yes-no">
	<div class="ebox-yn-text">
		
		
		<div class="ebox-yn-headline" style="font-size:22px;color:#888888">
			<p>If you only give once a month, would you consider giving to CityWatch?</p>
<p>Your support fuels our mission to promote and facilitate civic engagement and neighborhood empowerment, and to hold area government and its politicians accountable.</p>
<p>Would you like to help? Even if you can only give $5, it will make a difference.</p>		</div>
			</div>
	
	<div class="ebox-ys-buttons" style="font-size: 16px;">
		
<a
					data-ebox-prevent="0"
		data-ebox-cmd="close"
				target="_self"
		href="https://www.citywatchla.com/donate"
		rel="noopener"
	
	
	
	
	class="ebox-ys-btn"
	style="background-color:#2ec664;color:#ffffff;min-width:100px">
	Yes
	</a>
<a
	
	
			data-ebox-cmd="close"
		href="#"
	
	
	class="ebox-ys-btn"
	style="background-color:#ef2345;color:#ffffff;min-width:100px">
	Not Right Now
	</a>	</div>

	</div>			</div>
		</div>
	</div>	
</div>