The growth of the city budget shot up from $69 Million in 1999, to $471 Million by 2007 - quite an increase. This caused increased reliance in the city's finance department, and, accounting practices became less pressing needs.
After two major financial failings last year, however, the city went out and hired an accounting firm. It seems as though the finance office just couldn't keep up, and, an audit was needed. Auditors arrived this past Monday to start looking at everything from city payments to surprise investment. City leaders, at this point, hope that the audit will identify flaws in the city's financial state.
It appears as though the failure to keep up with accounting demands is a byproduct of rapid growth. This latest audit follows a problematic one from 2007, where a California based consulting company decided that the city had real, serious financial issues.
City leaders were more hard pressed to order this latest review after two embarrassing disclosures were announced. For one, in July of 2008, the city failed to perform an industry standard procedure, contributing to a $4.5 Million shortfall. Second, the city discovered overpayments to more than 20 former employees; these were severance payments that cost the city about $28,000.
In essence, the city's system is broken. Cities typically use accounting software specific to their individual size and needs. The system the city uses is in questions. Two years ago the Finance Department told city officials that the enterprise accounting software system was broken and frustrating. Things were never amended. The system was originally installed in 2002 for about $160,000, but it ended up costing the town a lot more in the long run. Finance employees describe the software as cumbersome, not intuitive, and not user friendly. The system takes up too much time and is inefficient, which in the end will cost the city even more - there are steps where data has to be entered, and re-entered in a tedious process, which leads to accounting errors.
As of now, the city has recommended installing a more sophisticated system by 2011. Until then, though, the finance workers will continue using their "Parallel System," a system that they developed themselves for more accurate reporting. A 2007 Citygate review, however, found that this system tracked purchase orders so poorly that auditors didn't even know what their fiscal condition was. While parallel systems do exist in some other cities and enterprises, it is almost a fact that they are not cost efficient or accurate enough to be the main financial solution.
Top financial officers still hope to implement a new software solution by 2011, and they will continue to expose and correct problems with the city's finances. Auditors expect to deliver a primary report by mid December, 2009. Until then, no one will know just how off the city's accounting and finances truly are.