OFFICIALS GET MONEY MANAGEMENT LESSON
January 12, 2001 11:00 pm

GOLD BEACH One of the first priorities of the new Curry County commissioners is getting more financial accountability from county departments.

To help department heads understand the new accounting requirements, the commissioners invited the countys auditor, Hallis (her full legal name) from Eugene, to speak Wednesday at the first of a series of informal work sessions.

Hallis has audited the countys records for about five years, and expected to review the latest audit before the week was out. She wouldnt reveal the results prematurely, but coached the department heads on accounting principles being pushed by the state and federal governments.

Hallis cautioned department heads, Just because you have a budget, you dont have complete spending authority if the revenue doesnt come in. Id be concerned if Id spent half the budget with 20 percent of the revenue in.

She explained that spending more than is coming in results in a negative fund balance. Unless there is a carry-over from the previous year to take up the slack, that would put a department out of compliance with Oregon budget law.

As department heads, she said, you have the responsibility to forecast what your working capital will be at year end. It needs to be sufficient to allow operations without negative income.

In other words, revenues must match expenses, not only by the end of the fiscal year, but all through the year.

On a month-to-month basis you should look at your revenue and ask Am I on track? she said.

She reminded department heads there can be a three-month lag in getting reimbursed from grant funds.

The state doesnt like to see borrowing between funds. She said paying a fund back the last day of the fiscal year and borrowing it back the next day is just poor management.

She advised department heads to use the old rule underestimate revenue, overestimate expenditures.

Accounting laws may vary state to state, but they all protect the citizens investment and maximize services for dollars spent. She said all governments are increasingly being asked to used the same accounting principles as for-profit businesses.

That can be more difficult because governments get their funds from so many sources. She reminded the department heads that having all those funding sources is still a big plus. The problem is that criteria always goes with each source.

There are always strings, she said, Even when you borrow from your mother.

Hallis said accounting requirements can erase the benefits of some grants. That needs to be analyzed before applying.

Commissioner Lucie La Bont said some counties have hired people to write and track grants.

Sheriff Kent Owens joked that Curry County should have been named grant county. He said he is comfortable using grants for equipment, but not for ongoing personnel expenses.

Hallis said there are strings attached to all grants of more than $5,000, even after the grant has been spent. You should be budgeting for what do we do and how do we do it, not for what grants can we get?

She added, Figure out what needs to be delivered and what it will cost, then how to pay for it.

Grants should be used for specific tasks, not to operate the county on an ongoing basis, she said.

Some of what are called grants are really annual allocations, like the WIC nutrition program grant. It is intended for ongoing operations, she said.

Given state regulations, property tax laws and restrictions on fees, counties have been doing a good job with accounting.

Department heads were not hired to have MBAs or masters in accounting, she said.

Curry County Clerk Renee Kolen said, This is different than what commissioners have asked of us in the past.

This is accountability, said Commissioner Marlyn Schafer.

Its state law, said La Bont. This is what we are supposed to be doing.

Hallis said, By and large, you should be able to forecast personnel costs, capital expenditures and revenues. Its really doable.

She said the department heads should want to know that information to avoid nasty surprises.

La Bont said, It helps the budget process too.

Schafer said, If not projected correctly, well be in a world of hurt. Im concerned thats where we might be right now.

County Accounting Manager Geoff Buchheim said some offices are hooked up to the main computer in fiscal services, and that others could come in and use a computer there to look up information.

Not necessarily so, said Marie Collins, director of computer services. She said due to a lack of people in her department to train others on how look up the information, many connections were turned off.

Hallis said, Its frustrating to have a huge computer system and not use it. Everyone should be able to query at any point in time. It gives you management information.

She said the state wants a record of achievements, of effort for dollars.

You can show what the taxpayers get for their money, she said, report how what you do affects the citizens.

Its coming, she said of the new accounting requirements, Youre going to have to do it.

Owens said, The public doesnt understand why you need the size of management you do. It will continue to grow.

Hallis said department heads could also ask how they could be more efficient, how to restructure.

La Bont said in the long run the new accounting method would make management easier.

County Assessor Jim Kolen said, Most of us already have the information. We just havent tapped into it.

Schafer said, We need to live for the future, not just day to day.

Community Justice Director Ron Mathis asked if there was any software, or state or federal assistance to help implement the new performance-base accounting.

Hallis said no because performance is measured differently for each department. There are different ways of looking at what you deliver.

She said the department heads must first decide what to measure, then how to quantify it. The benchmark for mental health may not be just the number of cases served, but to decrease the number of people in the community needing those services.

Benchmarks let you judge how youre really doing, said Hallis. It can be difficult to measure.

La Bont said, Thats when you get into strategic planning. The port and the county Road Department have done a lot of that, including goal-setting, she said.

County government must know what the public wants it to do, but county government must also know what it wants to do, La Bont said.

The key is getting the legislature to provide some funding for counties to plan.

She said they have already done that for ports.

Hallis said her firm audits for two Oregon counties and assists 17 California counties. In all of them, department heads say they dont know what their costs will be. Curry County has never had a cost-accounting management plan as required by the state, she said.

Each cost is based on a reasonable method, she said. Somebody in the county will pay.

Renee Kolen said, Those costs go up while budgets go down.

Hallis said they could ask why, but the costs would still be costs. Departments shouldnt charge to make a profit, but should still budget to save for replacement items like new computers or cars.

Hallis said the department heads need to be educated on federal rules on cost allocations. Then they need to hold a brainstorming session.

Schafer said, Things are more complicated now. We have to start thinking on different levels. It means more for the department heads.

La Bont said, This is the beginning of a change. We will have a tough row to hoe on July 1, but well start to do some real financial planning.

Well all be in it together as a team. Schafer added.

Hallis said, You have a decent resource with Geoff (Buchheim) on how to think about costing.

She said she could also be hired to help with costing models. She also recommended the department heads use whatever they find works somewhere else and share information.