Can Chip Flowers Manage His Department’s Budget? All Signs Point to No

Filed in Delaware by on October 6, 2013

In a bold act of *disclosure* this past Friday afternoon, at 4:30pm, State Treasurer Chip Flowers released his so-called “definitive and final report” on the problems his Agency has had with one employee in using her credit card in accordance with State regulations. This is a great example of the Friday afternoon data dump — in which you hope that members of the media won’t pay much attention and print your spin on this item. The Treasurer’s “report” was dumped so late on Friday afternoon, that the press release that came with this thing didn’t even get posted to the website yet. But perhaps this report was rushed out in an attempt to counterweight the News Journal article today that provides a big window into how mismanaged the expenses on Ms. Erika Benner’s state-issued credit card were.

Anyone with a Corporate Credit Card has been given some authority to spend on behalf of that organization. That spending almost always comes with a bunch of rules governing how and when the card gets used. Any manager who has any budget accountability checks that spending to 1) make sure the spending is within budget and 2) make sure that the spending (and the card) is used in accordance with policy.

In the Treasurer’s office, that spending was reviewed by someone with no budget responsibility. According to his report (this is Treasury Official A), this person was reconciling (not approving) the statements and receipts that came to his or her desk. Others were responsible to make sure that this information was correctly coded so it showed up properly in expenditures — but not approving. So who was responsible for approving the expenditures that were submitted? Approval of expenditures — meaning that someone who had to be accountable for that budget said OK to the spending — is completely missing. Unless I missed something in this self-serving bit of word salad. I did a quick survey of people I know who have State credit cards and so far all of them tell me that an immediate supervisor officially approves those expenditures OR there is a Comptroller or budget-responsible person who does the approval. This isn’t a proper survey, of course, but this is pretty similar to how this is handled in every corporation I’ve ever worked for.

So while this Treasurer keeps fighting to make decisions on his own regarding putting Delaware taxpayer funds at greater risk, we get — pretty much in his own words — that this Treasurer has no checks and balances on how his own budget gets spent. He is relying on coordinators and others to do the actual accounting — but in the case of these credit cards, no one in that agency seems to actually approve these expenses. A supervisor who has to review these statements before they got to the “reconciler” would have to specifically say Yes or No to expenditures AND would have been in the position of seeing these personal charges first hand. Then the supervisor would have had the responsibility of dealing with this employee who could not seem to use her credit card properly well before any of this got to the newspaper. And who was Ms. Benner’s supervisor? Why, Mr. Chip Flowers, whose report blames everyone else but him for the breakdown in what is a pretty routine bit of budget management. Yet this basic bit of line management is disavowed by Chip as the responsibility of the Division of Accounting.

As it relates to the Credit Card Program, the Treasury believes that Section 8304 is clear. The Division of Accounting is legally required to reject all statements which do not conform to the state’s financial controls (including controls prescribed in the accounting manual drafted by the Division of Accounting). Further, in the event of an improper financial transaction, the Division of Accounting has a duty to report the matter to the General Assembly, the Director of the Office of Management and Budget and the Attorney General. The law does not contain any exceptions. Stated simply, if a transaction under the Credit Card Program is not compliant with the program’s rules and regulations, in order to protect taxpayer funds, under Section 8304, the Division of Accounting has a legal obligation to report the noncompliant transaction to the aforementioned parties immediately.

The first line of financial control is always the supervisor with responsbility over this budget. If Chip can’t oversee the spending of his own employees, why do we think he’s going to do any better at investing our money?

And a quick couple of comments about this report.

  • Seriously? Really? This is supposed to reassure taxpayers about your management capabilities?
  • There’s no real sunshine unless names are named. Maybe the merit rules say otherwise, but there is little to trust when no one can tell if these people are even real.
  • The names that *are* named are the ones that Flowers is beefing with here — Tom Cook and Kristopher Knight.
  • At every single opportunity this thing blames everyone except for the person who should have been approving Ms. Benner’s card expenditures in the first place.

Today’s NJ adds some information that doesn’t come from the Treasurer’s “final and definitive report”:

Benner now has repaid the state a total of $6,051 in charges, according to an Aug. 30 memo issued by the director of the state’s Division of Accounting. Flowers did not disclose those additional repayments during interviews with The News Journal to discuss Benner’s use of her state credit card in August.

On June 28, at the request of Flowers, Benner repaid an additional $3,412.86 to the state for improper charges made over a two-year period dating back to May 2011. Flowers now says many of those charges were appropriate business expenses, and Benner may be due money back from the state.

Kristopher Knight, the director of accounting, sent Flowers the Aug. 30 memo, saying he is concerned that Flowers has offered conflicting statements about charges made by Benner on her state card. Knight is questioning why the state would return money that Flowers’ office determined earlier was an improper state expense.

Got that? There were more reimbursements by Ms. Benner to the state — asked for by Chip Flowers — but now he thinks that some of these reimbursements were appropriate expenditures for State business.

This is alot less likely to happen in an organization where line supervisors have to approve the spending of their subordinates. You expect oranizational accountability to increase the further up the management chain you get. In the People’s Treasury, organizational accountability doesn’t even seem to exist.

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"You don't make progress by standing on the sidelines, whimpering and complaining. You make progress by implementing ideas." -Shirley Chisholm

Comments (36)

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  1. cassandra_m says:

    This is the most recent status on Chip’s Facebook page. whoever is running this is actually deleting posts critical of his actions here.

  2. AQC says:

    I commented on that status asking if he had considered taking a moment to think about how immature that post sounds. My comment got deleted which proves he or his team have no insight into their own level of immaturity.

  3. Anon. says:

    I hear from a close source a picture of Chip in front of the scoreboard at the Patriots/Cowboys game is going to surface soon.

  4. AGovernor says:

    Sigh

  5. NC says:

    Sigh is right. This man is a victim of his own ego. I love how he chastised Cook and Knight for looking at his transactions. He had to know that when the lid blew off his Deputy’s improper spending, someone was going to go poking around looking at his transactions. His sad attempt at a preemptive strike on Friday was just that. How are you going to blame everyone else for your failure??? He is so delusional at this point that he believes his own lies. And they are lies.

    I won’t even get into the whole same types of transactions in the same places as his Deputy. Do these two think everyone is stupid? Furthermore, as the elected official, why was it necessary for his Deputy to travel to these conferences with him? As far as I can tell, these conferences were for State Treasurers not their appointed number twos. Perhaps, if she was back in Delaware running the office while he was away, and like she should have been…..well I guess we can’t even say that. She probably would have used that time using the state card inappropriately too.

    The stench from the man is getting worse. His advisers should probably tell him to shut up permanently. This is not going to go away and from all appearances its probably going to get worse.

  6. SussexWatcher says:

    “in light today’s newspaper article”

    “the lies told on me”

    Glad to know that literacy is so highly valued at the Peeps’ Treasury.

    I was rolling to read the article in the NJ. Flowers came across like a petulant little bitch making excuses for his own clear failures.

  7. Turk184 says:

    Cassandra – Nice post. The technical term for a”…routine bit of budget management…”, is called Internal Controls in the trade. I’m sure the State Auditor’s Office has noticed the glaring lack thereof in this instance. This could get very interesting.

  8. puck says:

    Let me get this straight: The improper personal charges have been identified and reimbursed, and resignation obtained.So now the problem is that, in an abundance of caution, she may have paid back too much? Holy Whitewater, Batman!

    Read the whole New Journal article; it is full of perfectly sensible answers and exculpatory information that didn’t make it into this post. I don’t have the energy to unpack it all here.

  9. Geezer says:

    Give up, Puck. A swimmer and a drowning man both use their arms. The difference is that one is getting somewhere.

    Chip Flowers is in over his head. Perhaps someday you will realize you have been bullshat (bullshitted?). The rest of us already have.

  10. BTW, lest anyone think that all of this is a smokescreen to keep Chip from realizing his dream to play casino with the state’s money, here’s what happens when states seek high returns by making risky investments:

    http://articles.philly.com/2013-10-06/business/42766227_1_tiger-management-sers-private-money-managers

  11. cassandra m says:

    So now the problem is that, in an abundance of caution, she may have paid back too much?

    That wasn’t a abundance of caution — that was a failure of the Internal Controls (to use turk’s term of art). If there was someone responsible for approving these expenditures in the first place, this likely would have never happened.

  12. puck says:

    Better also investigate whether she put too much postage on the envelope when she sent the checks in. And I hear Chip puts too much money in city parking meters!

  13. puck says:

    I see El Som is still working the discredited pension issue. I guess it is like religion now and impervious to facts.

    Anyway, I don’t have the patience to be the guest on DL’s knockoff of FOX and Friends today.

  14. Geezer says:

    There would be no investigation at all if Flowers had been more forthcoming.

  15. NC says:

    Geezer you are absolutely right! There are so many things he could have done to avoid all of this. Ego!!!

  16. cassandra m says:

    There would be no investigation at all if he had been reviewing and approving her credit card statements like most managers.

  17. Jason330 says:

    “definitive and final report”

    What is the “company culture” of the Treasurers office? From an outside perspective, there seems to be a lot of wishful thinking going on. They wish this was no big deal. They wish other offices picked up their management slack.

    I agree that it seriously undermines their argument about being able to gamble the state’s money for (potentially) higher returns.

  18. ‘definitive and final report’.

    Does that mean he won’t answer any of the questions that he so far hasn’t answered?

    And, if that’s what it means, how does that jibe with his public claim that he ‘has nothing to hide’?

  19. cassandra_m says:

    There’s nothing definitive about a report that won’t name names and skips over the fact that all of the emails are not attached AND are also redacted.

    The entire business is Nixonesque, really.

  20. Nuttingham says:

    Maybe they left some of the papers that would have helped with this report on that yacht during the fundraiser?

    The one sponsored by the same “pet banks” he likes to criticize?

  21. Jason330 says:

    That facebook post just adds another layer of crazy. Doesn’t he have a “No” or even a “I get where you are coming from, but let’s see how we feel about this in ten minutes” guy in his entourage?

  22. Nuttingham says:

    There’s at least three people who introduce themselves around in Dover as his advisors.

  23. cassandra_m says:

    And Nixon had both Haldeman AND Erlichman — it doesn’t help to have advisors if they are basically working pandering to your worst instincts.

  24. Gemma says:

    One would think that if someone’s office is concerned about keeping tight finincial numbrbers, as in the Treasurer, they would not make up numbers. Chip mentioned 30,000 messages of support, his Facebook has only 1,500+ members, so does that even make sense?

  25. Gemma says:

    Numberers autocorrected before I saw it. Sorry!

  26. liberalgeek says:

    Not to say that the 30K number isn’t made up, but there are more ways to receive messages of support than Facebook.

  27. cassandra_m says:

    Indeed. And we’re all waiting for the “final and definitive” report on that.

  28. puck says:

    He only got 15K votes in the election. Just saying.

  29. Geezer says:

    What they allege is usually what they’re doing themselves. In political terms, he has no support at all, and we have all seen, since his entry into Delaware electoral politics, that he’s all too eager to paper the blog with “supporters.”

  30. Gemma says:

    Liberalgeek, I agree that there are more ways to receive messages. The number seemed a little inflated considering only about 27 people commented on fb showing support. That makes for 29,973 other messages of support being received in a day through other avenues, phone calls/emails. It all seems a little disingenuous.

  31. John Manifold says:

    Can Mitch be talked into hankerin’ to be State Traysurer?

  32. Mitch Crane says:

    No

  33. Anon69 says:

    For inquiring minds, I hear the AG’s office is putting an enormous amount of pressure on the former deputy treasurer to get the game pictures, emails and all other proof of a tumulus relationship between the Treasurer and his appointee. I suppose Beau and the Bidens finally will get this guy. The rumor is he knew all along of those charges and participated in them as well. I think mr flowers is using her as collateral damage and anyone knew her knows this started under the crooks watch. The more he denies the better off for those involved.

  34. Gemma says:

    I don’t really think Mr. Flowers needed the money off his Deputy’s card. If he is using the Deputy as collateral damage, wouldn’t that turn out worse if the above statement about the nature of their relationship is true? It seems like she would hold all the cards.