Atlantic Cities

Detroit Lost a $1 Million Check in a Desk Drawer

Detroit Lost a $1 Million Check in a Desk Drawer
Associated Press

The City of Detroit misplaced a million-dollar check sent to it by a school district. Which prompts two questions. How do you lose a million-dollar check? And: Why is a city in the year 2013 still using paper checks?

The first question is actually the easier one to answer. The story was reported by Bloomberg, which describes the situation.

In late February, cash-strapped Detroit received a $1 million check from the local school system that wasn’t deposited. The routine payment wound up in a city hall desk drawer, where it was found a month later.

First of all, compared to the city's 2013-2014 budget, $1 million just isn't that much money. The city's budget is $2.5 billion — meaning that this check constituted .04 percent. It's as if you, a person who makes $50,000 a year, lost twenty bucks. You wish you hadn't lost that twenty and it was stupid you did, but you're not going to go broke because of it.

And second, the check was "routine," just another million-dollar check that the city had to deal with. Which leads us to that other question: Why was Detroit still using paper checks?

Bloomberg talks about that, too. In short: It's like you lost $20 bills all the time because you never got around to learning how to use pockets.

Detroit doesn’t have a central municipal computer system, and each department bought its own machinery — much of which never worked properly ...

Detroit’s antiquated accounting processes have meant some bills go uncollected for as long as six years, according to [emergency manager Kevyn] Orr, cutting funds that could buy new squad cars, emergency vehicles or computers.

In other words: Detroit's failure to manage it's finances came down, in part, to its failure to manage its money. Even as the number of budgeted positions dropped by 50 percent between 2008–2009 and 2012–2013, the city's inability to even bring in the money it was owed hampered its ability to ensures its bills were paid.

Strategy one for addressing the budget shortfall might include checking other drawers around City Hall. Who knows how much might turn up.

This post originally appeared on The Atlantic Wire.

Philip Bump writes for The Atlantic Wire. All posts »

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