The Doerflinger Dilemma - UPDATED 11/13/09

UPDATE: I've added to this post as of 11/13/2009, A.M. - Additions at the bottom.

Originally posted 11/11/2009:

Tulsa voters yesterday elected a new city auditor, Preston Doerflinger. Mr. Doerflinger is a business owner and has a B.S. degree in Organizational Leadership from here.

He is now Tulsa's city auditor. One with no practical auditing experience or credentials. He will earn an annual salary of $73,500, and be in charge of all audits of a city wherein hundreds of millions of dollars pass through each year.

The job has been described by some as a simple job of manager of a department and a public relations officer. Not being satisfied with an inaccurate and anecdotal job description, I posted the actual job description of the office here.

There is in fact, considerable distance between the official City Charter job description, and the misleading and false job description cited above, used to convince voters that credentials were not needed for the job. The elected position pays a lot of money and its primarily because it is a job with a great deal of responsibility.

Mr. Doerflinger campaigned partly on a platform of activism. Activism is a quality which most auditors are not known to possess. There are no Government Auditing Standards ("GAS") related to the use of activism in auditing. Professional credentialed auditors are bound to be objective, not activist.

GAS 1.01 Auditing is essential to government accountability to the public. Audits and attestation engagements provide an independent, objective, nonpartisan assessment of the stewardship, performance, or cost of government policies, programs, or operations, depending upon the type and scope of the audit. Government Auditing Standards, July 2007 Revision

Mr. Doerflinger's rapid prominence could arguably be due to the previous auditor's forbearance regarding questions raised about the fire department training records.

Tulsa may be the only city of its size in the entire United States whose city auditor is not a CPA, and Mr. Doerflinger will be facing ineligibility based on upon lack his lack of professional credentials as soon as the next election cycle. It's been reported that Mr. Doerflinger believes he can get certified as a Certified Internal Auditor ("CIA") before the next election cycle, which would finally qualify him for the office he now holds, according to the passage yesterday of Proposition 1, which requires the City Auditor to be a CPA or a CIA. I've listed the qualifications for CIA certification below. To put it mildly, the endeavor is ambitious. The certification requires 24 months of internal audit experience, and the candidate will not be certified without it, even if they sit for and pass the exam.

In my research leading up to the election, I couldn't find one city whose auditor was not a CPA. As a point of reference, Jim Williamson, the City Auditor of Oklahoma City, is a CPA and Certified Internal Auditor. The Oklahoma City Council appoints its City Auditor.

Further and to the point, The Association of Local Government Auditors, Best Practices section, publishes a book titled Model Legislation Guidelines for Local Government Auditors, Third Edition, 2007

The Model Guidelines Book includes the following entries intended for all government auditors:

Standards

Professional standards provide an overall framework for ensuring that auditors have competence, integrity, objectivity and independence in planning, conducting and reporting their work. Legislation should require adherence to recognized government auditing standards such as the Government Auditing Standards issued by the Comptroller General of the United States. Also, the International Standards for the Professional Practice of Internal Auditing, issued by the Institute of Internal Auditors, is used by internal auditors in the private sector and in some local governments. Both sets of standards incorporate, by reference, the American Institute of Certified Public Accountants’ standards for financial statement audits.

Qualifications - Competent Leadership

The Auditor shall possess adequate professional proficiency for the job, demonstrated by relevant certifications such as Certified Internal Auditor (CIA), Certified Public Accountant (CPA) or Chartered Accountant (CA) or have an advanced degree in a related field with at least five (5) years of experience in government auditing, evaluation or analysis. The Auditor shall have a bachelor’s degree in accounting, business administration, public administration or related field. If financial audits are performed, the Auditor must be a CPA or CA.
Model Guidelines, p.3

What will it take for our new city auditor to become qualified for office? Here are the requirements from The Institute of Internal Auditors:

Program Eligibility Requirements

Education

Certified Internal Auditor (CIA) candidates must hold a bachelor's degree or its equivalent from an accredited college-level institution. Work experience will not substitute for an appropriate degree. A copy of the candidate's diploma, transcripts, or other written proof of completion of a degree program must accompany the candidate's application.

The IIA will accept student candidates into the CIA program who are: (1) enrolled as a senior in an undergraduate program or as a graduate student; (2) full-time students as defined by the institution in which the student is enrolled (a minimum of 12 semester hours or its equivalent is required for undergraduate students and nine semester hours for graduate students); and (3) register for and take the CIA exam while enrolled in school.

(In certain countries where higher educational degrees differs based upon cultural or societal factors, The IIA may accept internationally recognized professional designations as equivalent to a bachelor's degree. Additionally, in certain circumstances educational performance may be considered when a nondegree candidate has completed more than 90 percent of the academic requirements needed for a degree (in the United States, approximately 120 semester hours or 180 quarter hours of degree credits at an accredited college-level institution). Candidates who do not possess a bachelor's degree and who meet these circumstances should submit their educational and/or professional information with their registration forms requesting review and approval. The information submitted should be sufficiently detailed to determine equivalency.)

Character Reference

CIA candidates must exhibit high moral and professional character and submit a character reference form completed by a CIA, their supervisor, manager, or educator with their registration.

Professional Experience

CIA candidates must complete 24 months of internal auditing experience or its equivalent. Equivalent experience means experience in audit/assessment disciplines, including external auditing, quality assurance, compliance, and internal control. A master's degree or work experience in related business professions (such as accounting, law, or finance) can be substituted for one year of experience. Candidates may sit for the CIA exam prior to satisfying the professional experience requirement, but they will not be certified until the experience requirement has been met.

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UPDATE: I want to respond to an anonymous comment in the body of this blog instead of in the comments section, mostly because I've thoroughly researched this post. The comment was in the form of a question: "Is it true or is it not that Phil Wood wasn't a CPA or CIA when first took office?"

Here's my answer:

It is true, he was not. But I want to caution, we are talking about the future of Tulsa, not the past. We are talking about what is required NOW, not what was required in 1988. So it is not an entirely relevant question. Mr. Wood wasn't the subject of this blog post, because his qualifications are irrelevant now.

However, although Mr. Wood wasn't a CPA or a CIA when he took office, he was a Chartered Financial Analyst (once again, a lot of Tulsa blog readers only get the information that certain bloggers want you to get, not necesarily the entire story - the information is accurate, but incomplete and often steeped in ideology - there is nothing wrong with that - just a caveat).

Below is Mr. Wood's partial resume. It is an impressive resume, to say the least. Just concentrate on what his accomplishments were prior to 1988.

GOVERNMENT Tulsa City Auditor - elected 1988, 1990, 1992, 1994, 1996, 1998, 2000, 2002, 2004, 2006 - Secretary, Indian Nation Council of Governments 1988-2004 - Member Audit and Budget Committee of the Tulsa Housing Authority - Chairman, Municipal Employees Retirement Plan 1989-93 - Member Oklahoma Police Pension and Retirement Board 1991-94

WORK Registered Investment Advisor (1984-88) - Executive in Residence and Instructor, University of Kansas Graduate School of Business (1982-85)- Executive Vice President and Chief Financial Officer of Cities Service Company (1966-82) - Union Carbide Corporation Plastics Department (1948-66) - 10th Mountain Infantry Division U.S. Army (1943-46).

ORGANIZATIONS Member of the Oklahoma Society of Financial Analysts - President, Tulsa Chapter of the Institute of Internal Auditors, 1994 - Tulsa Chapter IIA Auditor of the Year 1993 - Former President, International Council of Tulsa - Member Regional Advisory Council, Princeton University Class of 1946 - Past Vice President of Arts and Humanities Council, Tulsa Opera and Magic Empire Council of the Girl Scouts - Member Hispanic American Foundation - President, Princeton Club of Tulsa - Tulsa Charter Change Committee 1989 - National Council for International Visitors Award of Appreciation 1987 - University of Tulsa Conference of Accountants Speaker 1983 - Tulsa Chapter National Secretaries Association International Boss of the Year 1979-80.

EDUCATION Princeton University AB 1948 - Chartered Financial Analyst 1986 - Certified Internal Auditor 1991 - Harvard Business School Corporate Financial Management 1979 - Wharton School Risk Management of Oil and Gas Exploration 1976.

Based solely on that resume, it could be easily argued that he was OVER qualified.

Further, he did get his CIA in 1991, which demonstrates that he was in a continuous cycle of education throughout his entire career, something most people who are not professionals, stop doing.

And Even More Further, although it was not required, he sat for the CIA 3 years after he was first elected. So even at that time he recognized that he needed it.