In January of 2009, I parachuted into Budapest Hungary - not literally but figuratively. I had a band of auditors in tow - a couple local Hungarian guys, a Culinary Institute of America-trained chef turned accountant, a very French Parissian woman and a super formal, bright guy from India.
What were we up to? We were reviewing the operations of Budapest Bank, a bank that General Electric (GE) owned. The higher-ups at GE Corporate decided that we must review the operations of this bank due to several factors.
Here are a few: (1) the remote nature (106 bank branches spread around the country), (2) lack of profitability (the Hungarian Forint lost 46% of its value against the Euro and Swiss Franc) and (3) the large amount of delinquent loans (borrowers in Hungary chose to get a lower-interest-rate loan by borrowing in Euros or Francs but their income was in Forint).
What a mess!
On top of all of this, there were hints of compliance issues and we would eventually find a woman that calculated the mortgage broker commissions was sleeping with one of the mortgage brokers and didn't disclose this relationship. A big "no-no".
I have seen it all.
The results published this week in the Forensic Review Report by North American Forensic Accounting reminded me of being in the trenches with my team in Hungary in 2009. These results were very disappointing to me as a citizen of our great city.
From the date of my election until the day I was seated as a member of our City Council, I poured over historic documents, made data requests of our city staff and discussed with the leadership of the city. I committed to work 500 hours on city business before taking office so I would understand on day one how our city operates.
What I found in those 500 hours left more questions than answers. Some of the answers I received were lackluster and did not inspire confidence. After taking office, I received some key phone calls and meetings over coffee with individuals that had far more history and knowledge about the city than I had. They opened my eyes.
We found breakdowns - the three documented breakdowns that were listed as the reasons for the Forensic Review were just the tip of the iceberg.
I said earlier that the findings were very disappointing. But, these findings were not surprising. In the absence of proper governance, processes, controls, training and independent reviews, the human heart will concoct many ways to make a mess of a business or a municipality.
We are turning a page in Yukon. We will not tolerate the ways of the past. We are moving forward with a robust governance environment starting with Resolution 2025-01 passed by the City Council and then implemented with the leadership of our City Manager, Mike Castro.
We will live by, as Mike Castro said, "the West Point Honor Code 'A Cadet will not lie, cheat, steal, or tolerate those who do.'"
We are looking forward but we are not ignorant of the past.