During the period when growth was taking place, and the result was a little more revenue each year, it was a common practice for many governments, businesses and even households, to simply add a little each year to “The Budget.”
The City of Beaufort has turned the challenge of the recent national economic crisis into an opportunity to explore new ways of doing business rather than simply waiting for things to get better.
Doing more with less, increasing transparency and creating an even higher level of accountability have been three of the main goals among during my first year as we address your City’s principal challenges. The integration of all of these missions is the key to our recent achievements.
In previous articles, I have spoken to the issues of “doing more with less” and initiatives to achieve public input and operational transparency. Today I want to address changes the City has implemented to improve accountability and protect your financial assets.
Ethical approaches to governance should be a given! Citizens should be able to assume their elected and appointed public servants are honest, do their jobs well and do not make mistakes or purposely abuse the public trust. Unfortunately this is not always the case.
I am saddened every day when I read news stories about abuse of public trust, squandering and/or inappropriately spending public dollars. I believe such failures of leadership lead to today’s increasing mistrust of government and the growing negativity toward those who work for the public. Accordingly, I believe it is important to share with you some of the important safeguards we have implemented to better organize city finances, protect your assets, and minimize risk.
I start with the assumption that every dollar the City collects belongs to the citizens and is put in our trust to be invested in providing needed and valuable services to our citizens. It is our responsibility to manage it and spend it wisely, to keep track of it in an accurate and timely fashion, and to protect it from human error or bad judgment.
Improved and Better Organized Financial Reporting
All governments provide some sort of annual financial reporting to its citizens. Typically, annual financial data and accounting processes used by the entity are reviewed by an outside third party (auditor), generating a document (“The Audit”) that includes financial data in the form of reports, graphs, balance sheets, and budget comparisons.
To assure better accountability, the City of Beaufort has adopted an audit process that exceeds these minimum “requirements.” We moved to a higher accounting standard by adopting The Certified Annual Financial Report (CAFR), which is reviewed not only by outside auditors, but also by a panel of peers in government finance (Government Finance Officers Association) across the country who “grade” or certify the report. CAFR is the nationally accepted “gold standard” of government accounting.
By organizing our financial data to a CAFR-required higher level of accounting standards, which includes management explanations, statistics about expenses and income over time and analysis and projections into the future, our staff can better manage and oversee accounts and know our financial position on a daily basis. How much cash is in the bank, are we doing the best we can with available resources, how investments are performing and what funds will be necessary to make ends meet when bills and payroll come due?
This is the kind of knowledge that has kept the City of Beaufort ahead of the curve during the recent national financial crisis and led us to decisions throughout last fiscal year ensuring we stayed on target, did not spend more than we would collect and reorganized services to maintain them at an even higher level for less cost. Put more simply, the additional data derived from CAFR allowed us to see where we were headed and pointed out ways to make cuts in time to avoid short falls.
I am proud to say that the City has been through the CAFR process two years and received top honors each year; our third CAFR is currently under final review by the Government Finance Officers Association.
The Financial Dashboard: Open to the Public
Another immediate benefit of achieving CAFR, is that the City’s financial data are organized so simply and forthrightly that staff are now able to post an easy to understand monthly “Financial Dashboard” on the City’s website. This allows any citizen to see, from month to month, the status of our financials, where we are at that point in time compared to budget projections and where your money is being spent. One can find the Financial Dashboard under the Finance Department link at www.cityofbeaufort.org.
Management Assurance Program: A Measure toward Prevention
Recently, we decided to implement an innovative program to overlay our CAFR-based financial management practices with even stronger analysis and greater transparency so that we maintain self-scrutiny and further assure the public that we are managing your assets effectively and efficiently.
Through our Management Assurance Program a third party looks very deeply into the city’s financial records on an ongoing basis somewhat akin to a continuous internal audit. Analysts search for irregularities, uncover possible posting errors, detect potential misuse of public dollars and address issues before they become unmanageable. While we have not found any irregularities in accounting or money management, this is a proactive measure to ensure we do not fall victim to the challenges some other governments and businesses have faced in recent years.
I am very proud to see our financial staff reaching into the future for new and better management tools and proven methods to stay on top of your assets in a preventive stature.
Finally, I must acknowledge that there is no doubt that these advanced financial controls, and tighter management of assets, adopted by this administration are largely responsible for the City not being caught unprepared for the financial crisis that has led other governments into bankruptcy and public scandal.
Please feel free to contact me with questions about this or any other City matter by emailing me at billyk@islc.net.
Wishing you the best of a safe and happy holiday season!
Billy Keyserling