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Highlights Images from the PDC Opening Ceremony
Tennessee National Guard Color Guard
Music City Trio
AGA National President Jeff Hart, CGFM AGA Thanks the PDC 2007 Sponsors! PLATINUM Accenture* GOLD BearingPoint, Inc.* SILVER American Appraisal Associates, Inc.* BRONZE Booz Allen Hamilton* BRASS Savantage Solutions* *Denotes AGA Corporate Partner | June 26, 2007 PDC Begins with Snodgrass Tribute & Kansas City Mayor Mark Funkhouser
Funkhouser said all his ideas about how government should be run were “set in stone by what I learned here” in Nashville. With a background in political science and social work and a longhaired, bearded appearance that reminded Greathouse of a rabbi, Funkhouser said he was a “nontraditional” hire. “They took a big chance on me and I’ve never looked back.” Under the tutelage of Greathouse and Snodgrass, Funkhouser said he learned that auditing is about evidence and that people were relying upon his answers. “I needed to be right. I couldn’t afford to be wrong. That lesson has stuck in my head for the rest of my life.”
From both men he also learned an enormous respect for auditing, “one of the most important and vital ways I could spend my professional life,” said Funkhouser, who did 18 years as the city auditor in Kansas City before he retired and ran for mayor. “Audit is central to a democratic government. It is how citizens maintain control of their governments. That has been a central idea of my career that I took from Bill Snodgrass and Frank Greathouse.” After one particularly galling mistake, Funkhouser said, “I didn’t have the sense to resign and no one thought to fire me.” So why did Funkhouser run for mayor after a long career as a government auditor? “I saw poor decisions being made by my government that had a real impact for regular people, and being a good city auditor wasn’t getting it done.” As city auditor, he had regularly surveyed the citizens and knew going into the campaign that there was a huge gap between the government and the governed. That knowledge gave him an edge the other candidates didn’t have. “I knew I could win,” he said. “No one else in the city thought I could, but I did. You get on the stump and say, ‘here’s how it is, here’s how it should be, and here’s how we fix it.’” He said he spent about $6 per vote while some of his competitors spent more than $250 and lost. With his wife serving as his campaign manager, Funkhouser’s low-budget effort took advantage of resources such as YouTube to mount free advertising videos, one of which included his toy poodle Maria endorsing him—an ad that garnered national attention and drove 12,000 hits to his website where all the pertinent information about his campaign was housed. “I had the image of a humorless curmudgeon so I played off of that and made people laugh,” he said. He also used the results of audits he had conducted in the city to issue press releases and generate attention for his campaign. It worked. Funkhouser beat out 11 other candidates in the primary and won the general election with a slim 1.1 percent margin, the city’s closest election in 70 years. “There’s a myth in this country that voters are apathetic,” he said. “They’re not apathetic, but they do crave authenticity.” After two months on the job, he says being mayor is “fun” but enormously time consuming. “I spend all my time talking and listening to people and have virtually no time to read” the mountain of correspondence that floods into his office. He equates it to trying to “drink from a fire hose.” To keep his priorities in focus, he had them printed on the back of his business card. Another thing he has quickly realized is that, “If I spend my four years answering all the questions (from the media), I won’t get a damned thing done.” As mayor he also has a new appreciation for the city auditor. Because of the time constraints of his new job, “I need the auditor to be quick, brief and specific. I need them to tell me important things I do not know, to point out significant opportunities to improve and pending disasters before the cameras show up.” Does it take audacity? “Yeah,” he said. “It does. And I learned how to do what I’m doing right here in Nashville in state audit. Thank you, Mr. Snodgrass.”
Enron's Spectacular Collapse Chronicled She did not write about the questionable outside partnerships that were used to prop up earnings, nor did she conceive of the level of deception at the company. Not only did Enron executives deceive investors, but they deceived themselves. They thought they were creative, they thought they were creating a new way of doing business, but many of them did not see how all the pieces added up. “You can’t always see outside of your narrow slice of the world,” she said. In the late 1990s, the energy giant’s culture was free-spending and self-deluding, McLean said. “Enron was not a good company brought down by a crooked CFO.” In fact, it was a bad business with a large cast of characters contributing to its demise, from the top executives to the accountants, lawyers and others who did not raise enough questions and helped the company stretch the rules. Almost every aspect of the business was twisted to meet Wall Street earnings expectations, she said, and almost everyone failed to do the right thing. “If anyone had said no, the whole course of events would have been different,” she said. The Sarbanes-Oxley Act, passed in response to corporate scandals, seems to be a deterrent to fraud in that CFOs now have to sign off on financial statements, attesting to their truthfulness, she said, but at the same time, it’s “not the ultimate fix by a long shot.” In Enron’s case, more rules may have created more possibilities for wrongdoing because in many cases, its financials did follow the letter of accounting rules while violating their spirit. “I am suspicious of rules and how far they can go in fixing the problem.” By: Marie S. Force, Christina M. Camara & Jennifer I. Curtin |
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AGA’s 56th Annual Professional Development Conference & Exposition (PDC) began Monday morning in Nashville with some good old Southern hospitality. The more than 1,800 attendees were treated to bluegrass music and a tribute to legendary Tennessee Comptroller of the Treasury William R. Snodgrass (pictured to the right with his wife, Faye), who retired in 1999 after 44 years in the job. Now Comptroller Emeritus, Snodgrass and his family, as well as his successor, Comptroller John G. Morgan, were on hand for Monday’s opening ceremony.
In a session entitled “Audits, Audacity and Accountability,” newly elected Kansas City Mayor Mark Funkhouser, Ph.D., CIA, delivered the conference’s first keynote address and gave credit to Snodgrass and the late Frank L. Greathouse, former director of state audit under Snodgrass. Both men influenced Funkhouser’s career during his 10-year stint in the comptroller’s office.
Bethany McLean, author and senior editor of Fortune, gave the audience a perspective of the Enron story five years after its spectacular collapse into scandal and bankruptcy. While McLean was one of the first journalists to write critically about the high-flying company’s financial statements and business model in 2001, she now says she was naïve.