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What you need to know for 08/22/2017

New training, procedures eyed for Rug City finances

New training, procedures eyed for Rug City finances

Schooling on issues like local government budgeting is among a list of actions Amsterdam officials a

Schooling on issues like local government budgeting is among a list of actions Amsterdam officials are considering to get the city’s beleaguered finances back on track.

Changing personnel, different computer programs and lax oversight on how money is spent is coming to a head this year in the Rug City, where roughly $2 million in federal funding is being withheld due to the lack of a standard, year-end audit.

Meanwhile, projects already underway are being paid with economic-development loan funding that’s supposed to be helping businesses create jobs.

Long-standing confusion over the city’s finances led officials to request a review by the state Comptroller’s Office ­— and the state agency is preparing an audit expected to contain more detail about how bad the city’s books are. In response to the audit, a draft of which has been under review since earlier this month, Mayor Ann Thane last week distributed a Corrective Action Plan for review by the Common Council.

Though spelled out now, the new plan isn’t really new, Thane said.

“I’ve been asking for this stuff since 2008, and I have brought this to the attention of the council again and again and again,” Thane said.

The plan identifies corrections sought by state auditors — and the first one sheds light on the financial disarray. Auditors said the city wasn’t making sure “accounting records for the operating funds and capital projects are complete, accurate and maintained in a timely manner,” a seemingly standard role in municipal finance activities.

In the Corrective Action Plan, Thane and the city’s deputy controller, David Mitchell, propose to write “step-by-step” instructions for accounting staff to follow — with each step including time frames to make sure the work is done when it’s supposed to.

The city’s finances went into a final tailspin in 2011 when former Controller Heather Reynicke got another job not long after a new computer accounting system was deployed.

The new computer system didn’t dovetail with the old one, and a new controller elected for 2012, Ron Wierzbicki, died in December, leaving the office vacant.

A new controller will be installed in January, although election results have yet to confirm a victor in the race between Irene Collins and Matthew Agresta.

Thane said that if plans are spelled out with what people are supposed to be doing, staff turnover shouldn’t have as great of an impact.

“Having written procedures will help, again, mitigate the problems of having an election cycle affect operations. If procedures are in place in writing, than someone can open a binder or open up something on their computer and know exactly what they’re supposed to do,” Thane said.

Another solution offered is setting up steps to assure capital funds are not co-mingled with operating funds and to “appropriately” record money borrowed by the city.

The plan goes further than changes in the Finance Department, however. Because the city government is charged with making sure that department and others are doing their jobs, the Corrective Action Plan calls for mandating financing schooling for city leaders.

“As a better understanding of municipal finance is needed to properly oversee the Department of Finance, the council will revise the City Charter or code to necessitate that the mayor and each alderman be specifically trained in municipal budgeting and oversight,” the draft states.

If the city goes forward with the plan, it would require at least eight hours each year of classes or workshops accredited by the state Comptroller’s Office.

The draft Corrective Action Plan includes a variety of other suggestions, including the development of “simple, clear and informative” expense- and budget-tracking reports that can be given to members of the Common Council.

Training for staff in the city Controller’s Office, a study of the state’s Local Government Management Guide before developing budgets and the development of a long-range fiscal plan also are suggested in the Corrective Action Plan.

The idea of getting training, Thane said, is critical due to the increasingly complicated nature of municipal finance. City government finance is a difficult topic that involves insurance, workers’ compensation, bonding, purchasing, payroll, cash transactions and reconciling ledgers.

“It’s very, very specialized and complicated,” Thane said.

The Common Council is expected to review the draft Corrective Action Plan for possible action this week.

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