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City audit suggests HR review
Finance department overworked, audit says

Thursday, February 28, 2013

By MICKEY POWELL - Bulletin Staff Writer

Martinsville’s financial procedures are fine, but they might not stay that way if the city finance department loses another employee, auditors determined.

The department has four full-time workers, down from six a few years ago.

State law requires local governments to undergo audits after each fiscal year. Robinson Farmer Cox Associates, a Charlottesville accounting firm, audited Martinsville’s finances for the fiscal year that ended June 30.

Aaron Hawkins, the firm’s audit manager, told Martinsville City Council on Tuesday that no irregularities had been found during the auditing process.

However, Hawkins said the firm recommended the city review staffing and workload requirements of the finance department, considering that as employees have left the department, remaining workers have had to absorb their duties.

The finance department, the firm wrote in a report to the council, “appears to be understaffed in relation to other Virginia localities of a similar size” and any further loss of employees “could be detrimental to the city’s ability to perform many financial related tasks in a timely manner.”

The department’s staff shrank after former finance director Wade Bartlett left in 2007 and another employee, Donna O’Dell, became the city’s human resources director.

Current Finance Director Linda Conover had been the city’s budget analyst. She was promoted in late 2011 after former city manager Clarence Monday, who doubled as finance director after Bartlett left, decided that he no longer could handle both jobs. Monday left in January 2012 and now is the county administrator in Amherst County.

Bartlett now does the same job in Prince Edward County.

Amid budget constraints that kept the city from filling vacancies in the finance department, remaining employees took on more work.

In an interview, Conover said she now basically does three jobs — finance director, budget analyst and senior accountant.

She said she would like her department to have at least one extra worker to reduce the work load on current employees. That would enable the staff to pay closer attention to financial matters, she indicated.

Because finances are tight, though, Conover recognized that the council might not agree to fund the position.

“I do see it (another employee) is needed,” Mayor Kim Adkins said Wednesday.

Adkins said she knows the finance department employees lack enough time to monitor spending as closely as perhaps they should. That is because they must focus on getting day-to-day paperwork done and making sure that city financial transactions comply with regulations, she said.

Still, Adkins said it is too soon to tell if the city can afford another finance department worker. The budgeting process for the new fiscal year that will start July 1 recently began, and city officials have not yet determined all of the city’s needs for the year and how many can be funded, she said.

Conover noted that auditors do not render an opinion on the city’s financial health. Rather, they just make sure that the city follows proper procedures in handling and reporting its finances.

The city’s comprehensive annual financial report for fiscal 2012, which the council received on Tuesday, showed that the city received $30,554,378 in revenue during that budget year. The money came from numerous sources, including taxes, permit and license fees and federal and state funds.

City expenditures for the year totaled $31,186,889. As a result, the city basically had to use $632,511 in reserve funds to cover the shortfall, the report showed.

Conover said the city cannot afford to continue to use reserve funds to balance its budgets.

In other financial matters, the council learned that city revenues from July 1 through Dec. 31 — the midpoint of the current fiscal year — were $27,237,472. That is $437,671 more than the $26,799,801 that city officials expected would be received by that date.

Expenditures through Dec. 31 totaled $32,401,004, which was $313,724 more than the anticipated amount of $32,087,280.

Different amounts of revenue are received in different months. In months when expenses exceed revenue, the city uses reserve funds to pay its bills, replacing that money when additional revenue arrives, officials have said.

Amid city financial constraints, however, predictions are that the city’s fund balance will drop by $3,577,877, from $14,304,320 at the end of the past fiscal year to $10,726,443 when the current fiscal year ends June 30.

“That’s the worst case, if we spend every dime we’ve budgeted” for the year, Conover said.

The city purposely overestimates expenses and underestimates revenues each fiscal year, officials have said.

“We never spend everything that we budget,” Conover said.

On June 30, the unassigned fund balance — reserve funds that can be used to maintain cash flow and cover unanticipated expenses — is projected to be a little more than $2 million, a report states.

Also Tuesday, the council appropriated $221,787 from various sources, including federal grants and The Harvest Foundation, into the school fund for fiscal 2013, as well as $1,647 from grants, reimbursements and donations into the general fund. The money will be used toward expenses of various school and senior citizens programs, a document shows.


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