Newell: I underestimated "disastrous" management culture at SWBNO

Inspector General's report on dysfunction is shocking but not surprising

Newell Normand
August 20, 2019 - 4:55 pm
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Last week, Newell spoke with New Orleans Inspector General Derry Harper about what his department found poking around the beleaguered agency's Internal Audit office. Harper's report reveals unacceptable interference from management into a department that is supposed to be fairly independent as it goes about it's work trying to eliminate waste, fraud and abuse from the Crescent City's least popular utility outfit. 

Now, that report is in the wild and has landed on the desk of City Council members who are trying to improve the organization operation and reputation, and make sure that people are held accountable. City Councilman Joe Giarrusso joined Newell in studio this morning to give his reaction.

"This was a sham," Newell began. "Issuing reports with no empirical data to support them, pursuant to no strategic plan, no review by a committee... there's even an appendix in there where the then-Executive Director Cedric Grant said, 'what is this report, why did you send me this, this is of no value.' If he doesn't know what the auditor is doing - who does?!"

"The report brings home all the issues people think of when they think about the Sewerage and Water Board already... people are still skeptical and still cynical. Even though this happened under old leadership, they want to know their money is being well-spent and that it's being used for the right purposes," Giarrusso responded.

Almost everybody who is paying water bills in Orleans Parish has had issues with billing, ranging from a lack of transparency in pricing to fantastical stories of bills running into the thousands of dollars for one month of residential use. For a time they conceded the system was such a mess they had no choice but to suspend issuing late fees while such a high number of users were contesting their bills. Why can't SWBNO seem to get this right?

"Issuing bills and collecting payments are some of the simplest tasks that every business in America is engaged in," Newell said. "It would seem to be that at some point the Internal Auditor would be all over this, and it doesn't seem to have happened!"

"You're 100% right," Giarrusso replied. "As you well know, government isn't a business and it isn't always run by businesspeople, it's a bureaucracy. But when it comes to public dollars, people have to know where the money's going, how it's being spent, and making sure they're getting value for it all the time, and on top of all that - show your work."

Some of the things revealed in the report are stunning but in effect, tell us things about the agency that we already know. One such detail? They actually assigned the Internal Audit function to the Security section at one time. There's a memo in the report that talks about Internal Audit utilizing the resources of criminal investigation in order to develop a plan to go out and conduct investigations. That is completely and totally inappropriate. 

"I completely underestimated how disastrous the culture there actually is," Newell said. "I thought there was some semblance of an organizational culture that was doing something right. But when you see these things, no plan, no direction - and moving Internal Audit to the Security division, obviously people had no idea how this organization was meant to operate."

Giarrusso took this opportunity to point out that it's not the rank-and-file employees of the SWBNO that are responsible for these issues. "I've seen first hand a lot of people who work for SWBNO who are good employees and have been on deck in all types of situations. It's the middle management and senior management - that's been the issue. I continually have conversations like you where I think the biggest problem is the status of our infrastructure, but how do you get the personnel side working in a way that's more effective?"

Hear the entire interview in the audio player below.


 

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