By John Schaffner

A team from Deloitte Consulting has issued a detailed report on why the city’s Finance Department has been ineffective and virtually inoperable and needs major rehabilitation.

The consultants’ report, which was presented to the City Council’s Finance Committee on Feb. 25, says the department fails other branches of the government it serves and is unable to produce basic reports and to close out its books on a timely basis.

Asked by Finance Committee Chairman Howard Shook of Buckhead if they found anything that works at the department, Deloitte’s Robert Fabiszak said, “Accounts payable is pretty solid.”

The consultants reported the city doesn’t even have a consistent, stable practice for budgeting.

Fabiszak described the Finance Department to council members as constantly in a “fire sale” mentality, battling one crisis after another but not providing any strategic vision, planning or expertise.

One problem is that the city has gone through four chief financial officers in six years under Mayor Shirley Franklin. The present CFO, whom most council members praise, is scheduled to step down at year’s end when Franklin leaves office.

The City Council and the administration have tried to cope for more than a year with a financial crisis since the mayor revealed that mistakes in calculating year-end surpluses left recent budgets in the red. Those problems, coupled with a sharp downturn in revenues caused by the recession, are forcing Franklin and the council to make cuts for the fourth time since May.

Franklin was faced with making similar cuts early in her first year as mayor.

In mid-February the administration announced $20 million more in cuts were needed to this fiscal year’s budget, which ends June 30, to avoid another year in the red. It was hoped those cuts could be made without laying off any more employees.

Amid that negative news, however, Franklin hopes to get $1.8 billion in federal funds under the recently passed stimulus package. The money would presumably be used for projects at Hartsfield-Jackson Atlanta International Airport, for water and sewer improvements, for the hiring of 200 police officers, for sidewalk and road repairs, and for other improvements.

At least one council member said the mayor “has just thrown a number of projects against the wall, but she refuses to prioritize them in order of importance.”

A second bit of recent good news came from the Watershed Management Department: Its budget shortfall for this fiscal year now looks like it will be $30.5 million instead of $50 million. The new projection by Commissioner Rob Hunter is based on three factors: People are using more water; variable bond rate payments are not as high as previously thought; and sales tax revenues are improving.

The Feb. 25 Deloitte presentation sounded like another pro bono report, presented to Franklin at the beginning of her first term, regarding problems with human resources, technology and purchasing. That extensive report, presented by a team from Bain & Co., offered a guide to reforms needed in most city departments, including suggesting outsourcing many services to improve efficiency and reduce costs.

“We’ve been talking about the Bain Report since it came out in 2002, and now we have another pro bono company telling us the same thing, that Atlanta needs a front overhaul,” said Barbara Payne, the executive director of the Buckhead-based Fulton County Taxpayers Foundation (FCTF). “It’s been more than seven years — is the mayor ready to listen to words of wisdom now?”

“If Mayor Franklin outsourced just six or seven departments, the savings would be over $300 million annually,” FCTF President John Sherman said. “We don’t understand what she is waiting for. This is no way to leave a city that serves so many.”