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City accepts RAFTELUS finance assessment; council directs audit/investment committee split and follow‑up
Summary
Council accepted an organizational assessment of the finance department and approved staff direction to separate audit oversight from investment advisory functions, pursue a finance strategic plan and return with implementation steps.
Laguna Beach city council on Monday accepted an organizational assessment by consulting firm RAFTELUS that identified staffing shortfalls, turnover and process weaknesses in the finance department and recommended a package of reforms, including restructuring and new policies.
The assessment: RAFTELUS told the council the finance unit has been stretched by a combination of high staff turnover, implementation of a new ERP system and inconsistent leadership. The consultants delivered 20 recommendations with a 24–48 month implementation window; staff emphasized seven priority items including separating accounting and budget functions into two divisions, adding an accounting manager FTE (currently being recruited), adopting comprehensive financial policies via council resolution and creating a year‑end close checklist to avoid audit findings.
Council action and why it matters: The council voted to adopt staff’s recommended actions and to move forward with splitting audit oversight from investment advisory duties. City Manager David Kiff recommended designating two council members as an ad hoc audit oversight subcommittee and maintaining a separate investment advisory committee to retain Measure LL oversight and investment review. The council also directed staff to clarify the elected city treasurer’s role and report back with options on delineation of duties and any budget impacts associated with workload changes.
Implementation notes from staff: Finance Director Erica Castillo and City Manager Kiff said some recommendations are already in progress: a 10‑year forecast has been prepared, recruitment for an accounting manager is underway, and a shared department calendar and year‑end checklist are being implemented. Staff flagged the need to reestablish Audit and Investment Advisory Committees consistent with GFOA best practices and to create a finance strategic plan.
What the council asked for next: Council members requested follow‑up on clarified roles between the finance unit and the elected treasurer, proposed changes to committee structure, and a plan to evaluate recruiting/compensation challenges for municipal finance positions. The council also asked that the 10‑year forecast and other materials be made publicly available and returned with specific policy recommendations during the FY26 budget cycle.
Ending: Council members said they want a finance unit that can keep up with operational demands and provide the reports and controls the public expects; the RAFTELUS assessment provides a roadmap but staff must return with specific, budgeted implementation steps.
