DeKalb’s Finance Division is a story of loss and low priority

DeKalb’s city council has so far failed to face the troubling results of its last annual audit. This has led to a failure to recognize the connections between those results and the turnover and staff reductions in Finance Division, including the loss of a full-time finance director.

And the squeeze is still on for this year.

Reorganizations”

To put this into historical context, DeKalb used to have ten full-time, in-house finance staff, including an appointed treasurer/controller and two senior account clerks. Now there is no named full-time treasurer or controller, reductions in positions have occurred three years running, and these remaining staff are supervised by the assistant city manager, who also supervises human resources and information technology personnel.

Source: DeKalb annual adopted budgets

I won’t argue that ten full-timers are appropriate now, or were a decade ago. I will point out that an example of benchmarking shows a range for funding finance operations of .7% to 1.8% of total revenues, and 1.2% was DeKalb’s average from fiscal 2010 through 2014 with its 8-to-10 employee staffing plans. Using budget projections for the current year, Finance will be funded at about .4% of total city revenues of $103 million, well below the benchmarked range and supportive of the hypothesis that understaffing is a factor in the errors uncovered by the 2019 audit.

Also, the city manager blamed at least two audit deficiencies on understaffing:

Specifically, because of fiscal constraints, the Water Superintendent was the only employee available to review the meter reads being imported into the utility billing software. In the near term, the Director of Utilities and Transportation will provide assistance in sampling reads for any inconsistencies. Additionally, with limited staff, bank reconciliations were not consistently reviewed by higher management.

DeKalb City Council meeting agenda, 6/22/2020, p. 3

This is a picture of basic functions not getting done.

Another symptom of understaffing is pressure placed on other departments, and I’ve seen evidence of that as well. For example, Finance used to handle all license processing. A large chunk of that job got farmed out to the city manager’s office in 2019 and my look-behind inspections yielded several significant errors, including licenses and applications for licenses that couldn’t be located.

Turnover

Unfortunately, what you budget for is not always what you get. On top of intentional shrinkage, the division has also experienced staff shortages that at times have become acute. Going back again to 2019, DeKalb had budgeted for seven full-time equivalent staff of six full-time individuals and two part-timers; but a note I made in October of that year — the middle of the busy budgeting season — showed two of the full-time positions were unfilled at that time.

The turnover problem, paired once again with staff reduction, continued into 2020. The assistant city manager position, which supervises Finance, was vacant for three months. The senior accountant was replaced by an “accounting manager” who came in mid-year and stayed only about four months, which position remained vacant until the hire of another accountant in mid-December. In short, DeKalb budgeted for two accountants and an assistant city manager and one or more of those positions was either vacant or filled with a newbie much of last year.

The city’s response: cut another full-time equivalent position for 2021.

Not the Finance Director we’re looking for

You know what could help a finance division that’s short an accountant? A finance director who is an accountant. As mentioned earlier, DeKalb’s nominal finance director is the assistant city manager, who has to split his time and attention in several directions. This person also is not an accountant, even though finance directors by definition are supposed to have extensive accounting backgrounds as well as progressive management experience. Depth of experience is especially necessary because, as is clear from Chapter 54 of the DeKalb Municipal Code, the finance director takes the place of the treasurer’s or comptroller’s office, usually the treasurer’s I believe.

That Finance at this point is still being denied the proper expertise in its director is clearly not just bad luck, either. The city found nearly $2.2 million to open a new division of its police department this year but couldn’t manage to shake loose a fraction of that to properly equip the people who take care of our money.

Notes & Resources

Calculations found in this post used projected budget figures from the originally adopted budgets (not taken from “actual” columns or amended budgets). Also, in calculating full-time equivalent employees, I counted finance director and assistant finance director because they worked exclusively for Finance, but not the assistant city manager, who does not. In a related issue, City calls it Finance Department but I call it Finance Division because of its wonky hierarchy and oversight of the past two years.

Related: TIF forensic assessment tells us how DeKalb operates

Related: “There was no felonious activity

Related: How red do the flags have to be?

Below: Fiscal 2019, 2020, and 2021 Finance organizational charts

2019-finance-org-chart

2020-finance-org-charge-adopted

2021-finance-org-chart