The Uncashed Cache

Harvey Olson started setting aside the checks in 1996. Not all the checks, just some of the checks--the ones he considered to be "problem items." Over the next three years, Olson, who has spent 21 years in the same unit at Minneapolis's Department of Public Works, stuck the checks his office received in his desk drawers and file cabinets--dozens at first, then hundreds of them. He buried them under stacks of paper and squirreled them away wherever he could find room. By late this spring he'd managed to stockpile more than $1.2 million in checks payable to the City of Minneapolis: a problem item in itself, and one that in June prompted an internal audit when those keeping track noticed that some of the city's money wasn't getting to the bank. That audit led to one big headache for the Department of Finance, prompted discipline and demotion for Olson, and is already setting off an overhaul in the way Minneapolis handles its coffers.

Until recently Olson supervised a staff of two in the special assessment branch in the Engineering Design division of public works. Special assessments, as most home and property owners learn sooner or later, are taxes levied by the city to pay for improvements to streets, sidewalks, alleys, and so on. In 1998 Minneapolis levied $8.9 million in special assessments; typically, they are paid by individual property owners over a number of years.

Part of Olson's job, as a real estate investigator, was to record incoming assessment payments. In theory, he would then forward them on to the Cash and Revenue Management (CRM) division of the city's Department of Finance, which would process the checks and deposit them in the bank. But in practice, as the June audit reveals, Olson fell more than a little behind in his work.

The problem first surfaced during an inquiry from the county's Property Tax Division. Someone there had noticed that reports on assessment prepayments by CRM didn't match Olson's numbers. Bottom line? Olson's records showed money coming in that hadn't made its way to the CRM in the finance department, and therefore hadn't made it into the city's bank accounts. Simply put, money--a lot of money--appeared to be missing.

CRM turned to Olson for answers. As inquiries were being made, according to the audit, Olson twice promised he'd get the checks over to CRM. That didn't happen, and a third phone call to Olson went unreturned. On June 24 one of his staffers, Scott Graykowski, handed two envelopes to CRM containing 612 checks totaling more than $310,000, most of them dated from 1998. CRM head Lori Economy-Scholler then notified the city's audit office. Olson was ordered to take some vacation leave while the auditor, along with public works and finance staffers, began the arduous business of figuring out just when, where, and how things had gone haywire.

By the time Director of Internal Audit Robert Bjorklund had completed his investigation in August, the number of uncashed checks amassed by Olson stood at 1,689. (The audit also noted, "There is no way to determine if all checks were located.") In all, the checks unearthed in Olson's desk, cabinets, and mountains of paperwork totaled $1,228,229.73.

As best the investigation could determine, Olson's heavy workload and small staff, which had shrunk over the years, led in part to the monumental check load: He just hadn't gotten around to verifying, recording, and forwarding the mountain of payments to their next stop. But that wasn't the whole story. Director of Public Works David Sonnenberg says what ultimately led to the snafu was Olson's determined reluctance to deal, once and for all, with the paper snarl. "We had a long-term, conscientious employee who didn't want to pass things along until he was sure they were right," Sonnenberg figures. "It got away from him."

According to the audit, "Mr. Olson went on to say that he used extremely bad judgment and is solely responsible for this situation, he tried to get things in order but 'just didn't get to it as he should have.'" The document also notes that Olson didn't tell his direct supervisor about the burgeoning backlog, and did not ask anyone for help. Olson is also characterized by current and former colleagues as "someone who consistently didn't delegate enough, is extremely knowledgeable in the special assessments area(s), dedicated, a great guy to work with, somewhat eccentric, and a perfectionist." His direct supervisor was quoted as saying that Olson "lives to work" and logs countless unpaid overtime hours.

The 54-year-old Olson tersely explains that he has "nothing to add, nothing to subtract" concerning the audit, calling it a "fair representation" of what happened. He has no hard feelings about how the city dealt with the him in the wake of the revelation: "I've been treated decently by Public Works before, during, and after this: no complaints, no objections."

The two employees who worked under Olson, Graykowski and Jim Woodward, both decline comment, referring the matter instead to their superiors. But according to the audit, Graykowski says he asked Olson on several occasions if the checks shouldn't be forwarded for deposit, but was told to keep accumulating them. Graykowski told the auditor he believed there was nothing at all wrong with 85 to 90 percent of the checks Olson was setting aside: They were good to go, ready to be deposited.