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Home My WebLink AboutCHERRY BEKARET HOLLAND LLP (2) Augusta Richmond GA DOCUMENT NAME: Dlex'(ljl &'tiACX-\-, <\ \\D\\a\'d, L.L. p. DOCUMENT TYPE: YEAR: CX) BOX NUMBER: " FILE NUMBER: \~Cf6 NUMBER OF PAGES: -.5 - . ,I I/f ...., DATE: November 27, 2000 TO: Augusta Consolidated Government - Finance Committee FROM: Cherry, Bekaert & Holland, L.L.P. RE: Reorganization of financial management functions - . " :~'-'.=:- -~. -.;~.._~:.-;. "0. ~ ;;;~! _.~.~ ~-. 7.t:~ ;> --,' ---- Overall recommendation: Approve a preliminary restructuring of responsibilities for financial management functions to improve accountability, enhance customer. service and strengthen internal controls. Backl!I'ound: As identified during the 1999 financial audit, the City's accounting records were inaccurate due to material internal control weaknesses in the internal control system and inadequate training on the new accounting system. Additionally, several key finance positions have been vacated by resignations during the year 2000 and remain unfilled. ,Cherry. Bekaert & Holland analysis: 1. We interviewed all employees in the accounting and finance divisions to better understand their job responsibilities, knowledge and contiIiuaI training. 2. We atlalyzed the current organizationSl chart and writtenjob descriptions on file to compare with the actual job performance and responsibilities. 3. We reviewed organizational charts of other similar governments, including Columbus, Georgia 4. We worked with the City's financial consultant, AI Slavins, to determine an appropriate organizational structure and assignment of responsibility. Findings: . We found in general that employees in the finance division have a high level of employee turnover, receive little job training and have minimal supervision. The accounting division, has a low historical turnover rate and is functioning properly. ~ . . We believe that the Finance Department lacks an appropriate leadership structure which can anticipate and compensate for changes. · We determined that the organi7~tiona1 chart does not reflect a direct communication link between the Finance Department and certain departments and constitutional offices. · We also found that the primary budget process was controlled by the City Administrator, not the Finance Department. . Based on our limited analysis, we believe that the City's financial reporting system and internal controls have not improved during the current year. Recommendations: We recommend that the Commission change the organizational chart to improve levels of reporting and responsibilities. We estimate that thes~ changes will cost between $60,000 and $130,000 per year, including benefits. Summary of Proposed Changes: 1. Director of Finance - The City should eliminate the Comptroller position and establish a Director of Finance. The new position would serve as the Chief Financial Officer for the City, which includes complete budgeting responsibility, continual financial communications with departments and constitutional offices, investment m~ement responsibility, and regular financial reporting to the Commission. Since many of these responsibilities were performed by the former City Ad.miriistrator, we recommend that the City perform a national search to hire a Director of Finance. The position should be established at a minimum pay grade of 63. We suggest that the City extend the contract with consultant AI Slavins to continue his contract until the search is complete. Including the cost redirect from the Comptroller position, we estimate that this new position should cost an additional $15,000 per year to hire an experienced Director of Finance. Since the Comptroller position is currently occupied, the Commission would need to determine an appropriate transition for this employee. This person should be allowed to apply for the new position. We have prepared the following transition options for the Commission to consider: a. Transfer to the Director of Internal Audit and reduce the cost of the outsource contract accordingly. b. Serve as the Interim Division Director of Financial Services. c. TennJnate d. Apply for other vacant positions in the government. . l .." ...:-' 2. Division Directors - We suggest that the City reorganize the Finance Department's organizational chart to include three divisions (accounting, budget/financial services, and fleet/asset management). a Accountinll Services - The current Assistant Comptroller of Accounting should be converted to the Division Director with a pay grade of 61. This change would cost between $500 - $6,000 per year. We further recommend the City change the Accounting Supervisor position pay grade from a level 44 to a level 48. This - change would be consistent with the payroll supervisor and the level of responsibility . We estimate that the reclassification cost will range from $0 to $7,000 annually. Additionally, this new division has two vacant accounting positions. b; Budget/Financial Services - The other Assistant Comptroller position is vacant. The new Division Director position should also be filled at a pay grade of 61. This change in pay grade would increase the annual cost of the budgeted position between $0 and $6,000. If it is practical, this position should be filled with the assistance of the new Director of Finance. Additionally, this division should establish a new position (Grant Accounting) with a pay grade of 47. We estimate the total annual cost for this new position to average $45,000. We further recommend that the City change the Senior Budget Analyst position from a grade 46 to a grade 47, which should cost between $0 - $2,000 annually. c. Fleet/Asset I?ivision - We believe that reorganizing these existing positions will encourage and promote the coordination of duties and responsibilities. Accordingly, we believe that the Division Director position should be reclassified to a pay grade 56, which would cost between $0 - $10,000 per year. We have included a proposed optional Fleet Operator position with an average annual cost of $40,000. However, this proposed position should be considered a lower priority compared with the other recommended changes. 3. Communication Liaison - The new Director of Finance should establish an appropriate communication network with department directors and constitutional officers. We recommend that the new organizational chart reflect the direct communication link between the Director of Finance and these departments. These formal communications should include planning and coordinating compatible financial, budget, and reporting systems. 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