Elgin extends contract with Gradient for hands-on finance work as interim manager warns of a long recovery

The Elgin City Council on Tuesday authorized work authorization No. 2 with Gradient Leadership Solutions, a firm assisting the city’s finance team with budgeting and audit preparation.

The interim city manager told council Gradient has been performing hands-on work “as staff” to help untangle longstanding accounting and budgeting problems, prepare for recent and upcoming audits and assist with the budget. She said the issues are more extensive than initially anticipated and that full recovery could stretch for years.

“We’ve just about come to a way forward certainly on the budget,” the interim city manager said. “I do have to say … when you think the closet door is closed, somehow more skeletons come out of the closet.” She added that while “we are making tremendous progress,” she would not guarantee a quick fix and estimated a two- to four-year horizon before current officials would be comfortable with the city’s financial condition.

The interim city manager said there is no current evidence of theft or malfeasance and recommended against a forensic audit at this time because it would not help the city get to financial fixes. “In my professional recommendation, you do not want to get a forensic audit because a forensic audit won’t help you fix it,” she said. She said Gradient’s role is to perform much of the audit and budget preparation work and to augment the city’s finance staff until the city hires permanent finance leadership.

Staff said the city intends to hire a finance director and a senior accountant; once those positions are filled the city expects to phase out the Gradient contract. The interim manager described the agreement as month-to-month with notice provisions and said she expected the engagement could continue through the remainder of the year and possibly longer depending on progress.

Miss Saunders, the city’s HR and finance director, and Lori Langford of Gradient were present for the discussion. The interim manager said Gradient’s representative had sent an email clarifying that the firm would do more than advisory work and would perform actual deliverables for the city. A financial briefing is scheduled for the council’s July meeting to update members on budget progress and next steps.

Council approved the work authorization after staff answered questions about scope, duration and the plan to transition responsibilities to city-hired finance staff.