Training lag, poor system use cited in GFOA report

GFOA representatives Elizabeth Fu, center, and Eva Olsaker, right, give their final financial report to county personnel on Tuesday afternoon. Elinor Huber, assistant clerk, is in the back.

Lack of training and poor utilization of the county’s financial system are the major issues listed in the final special financial report that county employees heard Tuesday afternoon.

Eva Olsaker and Elizabeth Fu of the Government Finance Officers Association (GFOA) submitted the final organizational assessment for finance in a 30-page report.

“There’s a lack of training and understanding and a lack of overall financial strategy in government,” Olsaker said.

She added that the county’s Internet Technology department has some general unknowns that “creates an element of confusion.”

Olsaker said the county should establish a financial position which would be responsible for financial policies.

“It’s an important role for the county to have,” she said.

If commissioners decide to add a position, they don’t know now where they will find the funds.

“I hope to build capacity for that additional position,” County Commissioner Mike Largent said.

Tuesday’s report in the commissioner’s room was presented to a room full of county elected officials and employees.

County commissioners hired the GOFA audit team last fall to search out problems that had caused a “no opinion” conclusion for state auditors after checking the county’s books for 2012.

The state audit for 2013 found improvements, but could not issue a positive opinion for that year’s assessment.

Estimated cost of the GOFA project was $80,000 or more.

Olsaker Tuesday said county staff was receptive to the GOFA representatives.

“They want to run efficiently and the staff knows they need training in certain areas.”

She said they also recommend the county develop a project team that would identify roles and responsibilities which are not clear at this time.

“My personal hope is it is seen as a county-wide process,” Largent said. “It’s critical we move this forward.”

The next move is identifying the project team and to develop action plans. Olsaker said they could be assisting the county for another three to four months depending how much the county participates.

“We have a real desire to create a county fix, not a commissioner fix,” Largent commented.

In the report, GFOA cited six major issues with the county’s financial system.

• Poor utilization of financial system. Over many years, the county has attempted to implement the New World Systems. GFOA found that the system is poorly utilized and doesn’t accurately support the county’s finance functions, and the county has not set up the necessary structure to make the system successful.

• Lack of training and understanding of financial processes. A consistent theme throughout GFOA’s assessment is the lack of training related to all areas of finance.

• Lack of financial strategy and governance. While the county has elected leadership who is involved with financial activities - auditor, assessor, treasurer - the county lacks the overall position that is not elected to drive the county’s financial structure.

• Lack of clear finance and the Internet Technology (IT) roles and responsibilities. Another consistent theme throughout GFOA’s assessment is the lack of understanding of staff roles and responsibilities, particularly related to finance and IT. The report also stated that it was evident that there is contention between IT and finance related to New World.

• Documented policies and procedures. The report stated that the county has too many processes that are informal, not being followed or inconsistent among departments.

• Ineffective chart of accounts. The county’s chart of accounts as set up in New World is not effective for the county.

“At a minimum, GFOA recommends the commission provide an update on the county’s plan to improve the finance function at every commission meeting. Improving relations and regaining the public’s trust should improve with a transparent governing body,” the report stated.

Recommendations made by GFOA include that the county review and document the IT department’s roles and responsibilities which strongly impact the county’s daily operation.

The county also should establish a training program for staff who are involved with financial functions.

Also part of the recommendations is to establish clear policies and approval processes for employee hiring.

Other recommendations included integration between the county’s public works system and New World and also the assessor’s and treasurer’s offices systems with New World. They recommended that committees be created to oversee the integration.

“Because of undefined roles and responsibilities, there is evident contention between IT and the finance function regarding New World maintenance and ownership,” the report said.

The report also stated that communication about roles and duties of elected officials should be done throughout the county. The county should create descriptions of the specific tasks performed by each office.

“Inadequate training across the county underpins many of the process deficiencies,” the report noted. “Through interviews with county personnel, four areas of training deficiencies were identified: inadequate training on the daily operations; lack of understanding of accounting principles; lack of understanding on financial reporting, and lack of understanding on how to use New World.”

The report also emphasized that training should be provided to both frontline employees and department managers.

The report also suggested the county observe Pend Oreille County’s example of its accounting practices.

“In addition to issues of trust within the county organization, the public and other public entities have also lost confidence and trust in the county’s financial operations. The county’s audit findings, the recent Whitcom’s adverse audit findings and numerous media publications identifying weak county finances have likely eroded the public’s trust. County staff also indicated that its inability to produce accurate financial statements has hindered the state’s confidence in the county to manage state program funding,” the report stated.

“Accurate financial reporting also involves periodic reviews of the organization. At present, the county lacks an authority who proactively monitors and who works with departments to ensure that resources are managed appropriately,” the report concluded.