Our last article discussed the concerns raised by the Office of the NY State Comptroller (OSC) over financial transparency and accountability in New York State Villages. The OSC report entitled “Transparency and Accountability of Fiscal Activities in Villages” indicates that many of the weaknesses in village financial reporting can be attributed to vacancies and inconsistencies in CFO roles. Understaffing isn’t a new issue for local governments—over the last several years, experienced employees have been retiring from the civil service without enough incoming staff to replace them. Younger generations are less drawn to the public sector for various reasons, including the appeal of higher-paying private sector roles over state benefits and pensions. Insufficient accounting staff in municipalities increases the risk of serious issues such as errors in financial reporting, missed deadlines, and a lack of transparency and accuracy in financial processes. Given these and other factors, outsourcing accounting functions may be a prudent choice for local governments. So, is outsourcing the right decision for your municipality? Let’s consider some of the benefits.

Expertise and Accuracy

Access to expertise is the most significant advantage of outsourced accounting. Accounting firms are equipped with seasoned professionals well-versed in financial management best practices and the latest regulatory changes. These professionals provide advice on financial decision-making and ensure compliance with legal requirements, minimizing the risk of costly errors and penalties. An outside expert specializing in governmental accounting can help a municipality identify ways to operate more efficiently, maintain compliance with unique governmental regulations, and reduce the risk of fraud.

Continuity of Service

Given the staffing shortage currently facing the public sector, civil servants who leave their positions can be difficult to replace. While in-house CFOs or accountants can resign, fall ill, or go on vacation, leaving the municipality with operational gaps, accounting firms have staff available consistently to ensure uninterrupted service.

Reduced Staffing Costs

One factor a municipality must consider when deciding whether to outsource services to an accounting firm is the real cost of hiring a new full-time employee. In addition to salary, the municipality also bears the cost of recruitment, employee training, medical benefits, and payments into a pension fund. New hires also require time to adjust to the role, learn the ropes, and reach full productivity. Outsourcing eliminates many of these costs associated with in-house hires. Additionally, outsourcing allows municipalities to pay only for the services they need rather than paying an employee for full-time work.

Latest Technology

Another advantage that comes with outsourcing is access to up-to-date accounting technology. Most accounting firms employ the latest accounting software and tools, facilitating efficient, accurate, and timely financial reporting.

Focus on Priorities

By delegating financial management tasks to outsourced accountants, local governments can concentrate on their primary mission of serving and supporting the community by providing essential services. By leaving accounting responsibilities to experienced and reliable professionals, municipalities can be assured that all financial and regulatory requirements are covered.

Ready to Outsource?

RBT CPAs offers outsourced accounting services to municipalities in the Hudson Valley and beyond. Our experienced professionals understand the unique factors and challenges impacting local governments. Whether you are looking to outsource your municipality’s accounting functions or seeking guidance related to tax, accounting, or audit matters, RBT CPAs is here to support you. Get in touch with our experts today to find out how we can be Remarkably Better Together.

Financial statement audits are crucial to any organization’s financial health, and government entities are no exception. A financial statement audit provides an independent assessment of an organization’s financial statements, which in turn ensures transparency, accountability, and a strong foundation for future planning. Preparation is key to ensuring a smooth audit process and avoiding delays. Here are some ways municipalities can prepare for a financial statement audit.

1. Create an audit committee.

An audit committee, made up of members of the governing body, oversees the audit process. The committee acts as the primary point of contact between the auditor, the governing board, and the appropriate staff or departments. The committee also reviews audit findings and assists in recommendations for improvement. The Government Finance Officers Association (GFOA) makes certain recommendations for the establishment of audit committees, which can be found under the “Best Practices” section of their website.

2. Know the regulations and requirements.

The audit committee should be familiar with the various regulations governing financial reporting for municipalities. The Generally Accepted Accounting Principles (GAAP) and Governmental Accounting Standards Board (GASB) guidelines lay out the rules for financial reporting for government entities. This guidance is frequently updated, so municipalities must stay up to date with the latest updates and revisions to these standards.

3. Understand the audit process.

The audit committee should understand the scope of the audit (what will be assessed), the timeline, and the roles and responsibilities of everyone involved. The audit committee should also understand that audit-ready means that all supporting documentation should reconcile to the trial balance before the auditor’s review. The auditor’s role is to verify accuracy, not to make adjustments. Any necessary corrections should be identified and addressed before the audit begins to ensure a smooth and efficient process.

4. Gather all necessary documentation.

The municipality must request, collect, and organize documentation and information from the appropriate departments and staff, per the audit requirements. This includes general ledgers, detailed schedules of account balances, bank statements, invoices, receipts, payroll records, purchase orders, contracts, and other financial documents. The documentation should be easily accessible for the auditor, and all financial records should be reviewed for accuracy prior to an audit.

5. Review internal controls.

Regular internal control assessments help to strengthen the mechanisms for preventing fraud and abuse within an organization. Internal controls include procedures for authorization, record keeping, reconciliations, and auditing. These processes must be periodically reviewed to ensure that they are achieving their objectives in preventing risk to the municipality.

6. Review prior year’s audit findings.

Ensure that corrective actions have been taken for any deficiencies identified in the prior year’s audit. This will not only reduce the likelihood of repeated findings but also demonstrate your commitment to improving your financial management practices.

7. Communicate with your auditor and prepare for questions.

It’s important to keep an open line of communication with your auditor, maintaining transparency throughout the audit process. Make sure you disclose any changes to your financial systems or operations. Be prepared to answer questions regarding your municipality’s financial procedures and processes, internal controls, documentation, operations, and personnel.

A financial statement audit can be a daunting and sometimes stressful event, but through preparation, the opportunity for error and disorganization can be reduced. Municipalities can follow the guidelines above to ensure the audit process runs as smoothly and efficiently as possible. If you have any questions about the audit process for municipalities—or if you need any other audit, accounting, tax, or advisory support, please know RBT CPAs is here for you. We’ve been proudly serving municipalities, businesses, non-profits, and individuals in the Hudson Valley for over 50 years. Please don’t hesitate to give us a call and find out how we can be Remarkably Better Together.

Procurement is in the spotlight on global, federal, state, and local stages. Driven by rising costs, supply chain fragility, the beyond-fast evolution of technology, social and environmental concerns, ever-changing legislation, staffing challenges, and more, all levels of government are being challenged like never before to modernize procurement with a keen eye toward cost savings, sustainability, and compliance.

One survey identifies the complexity of systems and processes as the top procurement challenge across industries, with rising costs and preparing for unexpected challenges being the next two biggest challenges for government.

The National Association of State Procurement Officers (NASPO) defined top priorities for state procurement in 2024 as modernizing the procurement process (moving up from the fifth priority in 2023), continuous process improvement, talent management and succession planning, and more.

Cybersecurity, sourcing requirements, climate/sustainability, supplier diversity, and more are converging to put more demands on procurement. Agility to promote repeatable quality processes that offer flexibility, deliver results faster, incorporate user feedback, and respond to changing needs while addressing talent challenges and upholding the myriad of regulations appears to be central to addressing today’s procurement challenges.

E-procurement is taking the lead as a prominent trend, with municipalities increasingly adopting digital solutions for tendering, bidding, and contract management in an effort to shorten the procurement cycle, enhance transparency, reduce paperwork, and improve efficiency. At the same time, it promotes equal opportunities among suppliers to bid by providing greater access to information.

Sustainability is increasingly being embedded into procurement practices, with a focus on acquiring services and goods in a manner that protects and supports the environment, while promoting ethical practices and supporting social welfare. (New York’s Green Purchasing Community provides a framework for local governments to ensure purchasing has a lower environmental impact while earning points toward Climate Smart Communities Certification.)

Data analytics and artificial intelligence point to increased opportunities for municipalities to use data for insights on spending, performance, and market trends. AI can help detect fraud, improve decision-making, and automate processes, while predictive analytics improves forecasting and increases cost savings. According to NASPO, there may be ways for AI to help vet suppliers, track supplier performance, identify problem suppliers, and detect fraud.

Beyond technology, municipalities are looking to create job opportunities and drive economic growth with a greater focus on supporting small and medium-sized businesses (SMBs) via their procurement processes. Some are adopting policies to award a percentage of contracts to SMBs while making bidding easier and providing assistance to help SMBs navigate the process.

As your municipality explores opportunities to modernize procurement while operating within New York State laws, you can count on RBT CPAs to focus on your accounting, audit, tax, and advisory needs. Give us a call to find out how we can be Remarkably Better Together.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your organization’s confidential financial data.

With budget season around the corner, the following are some strategies and changes you may want to consider.

Rethinking How You Budget

While line-item budgets for municipalities served their purpose for a long time, in 2022 the International City/County Management Association (ICMA), the Government Finance Officers Association (GFOA), and the National League of Cities (NLC) came together to explore modernizing local government budgeting to be more responsive to community needs, reflect today’s technological capabilities, and better align with the way the world works via their Rethinking Budgeting Initiative.

At the heart of the initiative is the transition from line-item budgets to priority- and program-based budgeting.

Priority-based budgeting puts community needs and requirements at the forefront of the municipality budget planning process. This approach offers the added benefits of having a budget that serves as a strategic plan and decision-making tool to ensure a community’s top priorities – for example, having a safe community where residents, workers, and businesses can thrive – are resourced appropriately.

Program-based budgeting defines the programs and services a municipality provides in a manner that’s more understandable and useful to residents. For example, showing the budget for police patrols is a lot more meaningful to residents than embedding those costs into line items for salaries, benefits, contractual services, etc.

At a time when inflation is stretching residents’ and municipality budgets, while demands for services and mandates increase, taking a new approach to budgeting may help promote community understanding, trust, and support when you need it most.

Minimum Wage and Exempt Threshold Changes

Pivoting from the strategic to tactical, we just want to provide a friendly reminder that 2025 wage and pay-related-benefit budgets will need to reflect January 1, 2025:

• Minimum wage increase (of $.50/hour);
• Higher NYS DOL thresholds for administrative and executive employees exempt from overtime (increasing from $58,458.40 to $60,405.80 in upper New York and from $62,400 to $64,350 in NYC, Westchester, and Long Island); and
• Higher FLSA threshold (jumping from $43,888/year to $58,656/year) for professional employees exempt from overtime.

If during your budget or strategy development you need assistance, please know, RBT CPAs professionals are available to provide advisory, accounting, audit, and tax services, while our Visions Human Resources Services affiliate can help with all things people-related.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.