October 5, 2011
Audit finds city finances are in good shape
The city ended 2010 in much better shape financially than a year prior, according to an audit of the city’s financial statements presented Tuesday night at the Common Council meeting.
“I think things are in good financial order at this point,” said Randy Shepard, a certified public accountant from The Bonadio Group, which conducted the audit.
The financial picture reflects a year when the city had “drastic improvement” in overall tax collections, sales tax revenue exceeded the predicted amount by $343,000, and the city’s unreserved general fund balance increased to $1.5 million from a $300,000 deficit.
“We’re better off this year than we were a year ago,” said Director of Administration and Finance Mack Cook, who delivered a presentation on the city’s finances during the meeting.
Cook is working with city department heads to prepare a draft of the city’s budget, which is due Oct. 15.
The audit said the city’s ability to foreclose on delinquent tax owners’ properties has led to increased property tax collections. The city collected 94 percent of its total tax levy in 2007 and 97 percent in 2010.
Cook said things are looking up this year. The credit-rating agency Standard & Poor’s recently upgraded the city’s bond rating from BBB to BBB +. Cook said the upgrade comes at a time when thousands of municipalities are seeing their ratings downgraded.
“Cortland is bucking a trend,” he said.
The auditors recommended the city develop an accounting manual that could decrease the amount of time spent training new staff members with accounting responsibilities.
The manual should include an organizational chart of the city, job descriptions and duties, descriptions of accounting principles to be followed and other information.
Other small recommendations include reviewing fund balance reserves on a quarterly basis and establishing a uniform reporting of sick and vacation time across city departments.
Cook said the city was working to address those concerns and that some of them overlapped with points addressed in the state comptroller’s audit, which was released in December.
The comptroller’s audit was critical of the city’s financial condition and its oversight of payroll, receipts, health insurance and compensation for leave time.
It also recommended changes to the city’s financial controls, including centralizing the payroll, working with the county for financial management computer software, and better oversight of employees’ leave and health insurance payments.
Cook plans to make presentations at council meetings between now and April. The presentations will address various issues raised in the comptroller’s audit and how the city can implement changes in response to the report’s recommendations.
During the meeting, Cook discussed the city’s options when it comes to its information technology network. The comptroller’s audit recommended the city update its information technology system to improve the way city employees share information with one another.
He said the city can choose from three options: adding fiber optics, broadband or web-based cloud computing, which would enable the city to share data and software it needs “in a cloud” that all city employees can access online.
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