Finance director says staffing gaps slowed audits, expects current audit in January

David Little, the city’s director of finance, told the Finance Committee on Nov. 18 that long-running staffing shortages and new Governmental Accounting Standards Board requirements have contributed to delays in producing the city’s annual financial statements. Little said the city previously issued audited statements in March (2021 and 2022) but this year’s audit slipped and he now expects issuance in January rather than the typical December timeline.

Little detailed the finance department’s core responsibilities — reviewing and reconciling bank activity, processing weekly payroll and direct-deposit files, inputting vendor invoices, preparing RFPs and bid tabs, and supporting the annual budget and third-party audit. He said the department recently added a grant-writer position to pursue external funding and has been using temporary staff and cross-training to keep payroll and vendor payments on schedule while some employees were out for extended periods.

The director attributed part of the delay to a statewide shortage of accounting firms and to recent pronouncements from the Governmental Accounting Standards Board that required additional disclosures and third-party agreement reviews. “We’re sending them information every day,” Little said of the auditors, noting auditors had been on site for three weeks and multiple departments still have outstanding items to provide.

Committee members pressed Little on recruitment and whether positions could be remote or hybrid to attract applicants. Little said many treasury and payroll tasks require on-site access to the city’s software and that some recent software versions did not support automated application of electronic remittances. He said the city broadened job postings nationwide to find candidates and is discussing flexible options with Human Resources but cautioned that on-site work remains necessary for many duties.

Councilors also raised concerns that the current backlog and delays resemble the conditions that previously produced an audit finding described as a material weakness. Little said the city is aware of management-letter recommendations (including segregation-of-duties issues that are difficult to address without more staff) and that any decision to add staff will be considered in the budget process because it affects the tax rate.

The committee was told temporary staffing helped clear the finance department’s scanning and attachment backlog and that treasury/city-clerk staff — whose functions are combined — have been working overtime to process mail-in payments and other backlogs caused in part by recent elections and higher motor-vehicle and utility volumes. Little said the department is “nowhere near where we were last year” in terms of delays but acknowledged more work remains.

The committee did not set a new firm deadline for audit completion beyond Little’s expectation of a January issuance; several members urged prioritizing bank reconciliations and deposit processing to avoid repeat findings. The city will start department budget conversations in January in preparation for the city manager’s recommended budget later in the winter.