Post on 05-Feb-2020
2014 Local Government Benchmarking Study
Results Overview by
Krista Edoff, Partner Cherry Bekaert LLP
Government Services Group
Learning Objectives
At the end of this course, participants should be
able to:
Understand current management trends for local
government entities
Gain insight into the current areas of concern shared
by government finance professionals
Gain an understanding of what finance professionals
believe the future holds for government financial
management
Have data for internal benchmarking and budgeting
Presentation Objectives
Review Participant Data
Review responses in the following functional areas: Work Force & Benefits
Financial Reporting
Use of Technology
Debt Structure
Grant Reporting & Administration
Budget
Risk Assessment & the Audit Process
Participant Data
Type of Entity
5
21%
37%
18%
24%
County
Municipality
School
Authority/Commission/Other
By Title
6
38%
31%
30%
1%
CFO/Director of Finance or Equivalent
Controller/Accounting Manager or Equivalent
Accounting Staff
Elected Official
Size of Entity
32%
25%
23%
20%
0 – 500 employees
501 – 2500 employees
2501 – 5000 employees
>5000 employees
24%
25% 31%
20%
0 - 50 million
50.1 - 250 million
250.1 million – 1 billion
> 1 billion
7
By number of employees By revenue
Workforce and Benefits
Workforce and Benefits
7%
28% 29% 30%
6% 5%
32%
37%
19%
7%
16%
37%
23%
20%
4%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Fully Agree Partially Agree No Opinion PartiallyDisagree
Fully Disagree
2014 2013 2012
9
It is easier today to find qualified candidates for vacant financial and accounting positions than in the last budget cycle.
Workforce and Benefits
17% 12%
71%
9%
19%
74%
6%
46% 48%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Increased Decreased Stayed the Same
2014 2013 2012
10
In the last budget cycle, has your staffing level for financial and accounting positions:
Workforce and Benefits
11
16%
8%
76%
Increased Decreased Stay the Same
In the next budget cycle, do you anticipate that the number of filled financial and accounting staff positions will:
14%
13%
73%
Virginia
Workforce and Benefits
12
50%
2%
48%
Increased Decreased Stayed the Same
In the past year, have salaries throughout the entity:
60%
3%
37%
Virginia
Workforce and Benefits
13
8%
22%
70%
Increased Decreased Stayed the Same
Over the last year, has the benefits package you offered to new employees:
11%
29% 60%
Virginia
Workforce and Benefits
16%
23%
43%
8%
5%
61%
7%
Other (please specify)
We have not implemented any new measures
Increased employee premium
Reduced spouse and dependent coverage
Account-based healthcare plans
Wellness programs or incentives
In-house pharmacy operations
0% 20% 40% 60% 80%
14
Given rising healthcare costs, has your entity implemented any of the following to help reduce healthcare costs: (check all that apply)
Workforce and Benefits
11%
13%
56%
13%
10%
73%
4%
Other (please specify)
We have not implemented any new measures
Increased employee premium
Reduced spouse and dependent coverage
Account-based healthcare plans
Wellness programs or incentives
In-house pharmacy operations
0% 20% 40% 60% 80%
15
Given rising healthcare costs, has your entity implemented any of the following to help reduce healthcare costs: (check all that apply)
Virginia
Workforce and Benefits
11%
29%
1%
30%
50%
37%
Other (please specify)
The Affordable Care Act has not impacted myentity
Have been assessed penalties
Implemented changes to our insurance plans
Increased time and effort to ensure compliance
Increased healthcare cost
0% 20% 40% 60%
16
What impact has the Affordable Care Act had on your entity? (check all that apply)
Workforce and Benefits
7%
23%
1%
36%
60%
50%
Other (please specify)
The Affordable Care Act has not impacted myentity
Have been assessed penalties
Implemented changes to our insurance plans
Increased time and effort to ensure compliance
Increased healthcare cost
0% 20% 40% 60% 80%
17
What impact has the Affordable Care Act had on your entity? (check all that apply)
Virginia
Financial Reporting
Financial Reporting
19
13%
43% 21%
20%
3%
Fully Agree Partially Agree No Opinion Partially Disagree Fully Disagree
In general, the new standards issued by GASB meet the needs of its users.
13%
43% 21%
20%
3%
Virginia
Financial Reporting
20
8%
45%
10%
27%
10%
Fully Agree Partially Agree No Opinion Partially Disagree Fully Disagree
The current financial reporting model is understandable to elected officials and constituents.
7%
49%
6%
33%
5%
Virginia
Financial Reporting
21
11%
46% 11%
25%
7%
Fully Agree Partially Agree No Opinion Partially Disagree Fully Disagree
The current financial model is useful and valuable to elected officials and constituents.
6%
54% 8%
29%
3%
Virginia
Financial Reporting
22
32%
55%
13%
Yes No GASB 65 does not impact my entity
Did you early implement GASB 65?
31%
61%
8%
Virginia
Financial Reporting
24%
38%
42%
58%
42%
50%
We did not have any challenges/consultations
Restating prior year numbers in MD&A
The restatement footnote
General presentation in the statements
Identifying all deferred inflows and outflows at thefund level
Identifying all deferred inflows and outflows at theentity-wide level
0% 20% 40% 60% 80%
23
If your entity early implemented GASB 65, what challenges did you face or what consultations with your auditor did you have in early implementing: (check all that apply)
Financial Reporting
11%
56%
56%
61%
50%
56%
We did not have any challenges/consultations
Restating prior year numbers in MD&A
The restatement footnote
General presentation in the statements
Identifying all deferred inflows and outflows at thefund level
Identifying all deferred inflows and outflows at theentity-wide level
0% 20% 40% 60% 80%
24
If your entity early implemented GASB 65, what challenges did you face or what consultations with your auditor did you have in early implementing: (check all that apply)
Virginia
Financial Reporting
73%
27%
78%
22%
76%
24%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Yes No
2014 2013 2012
25
Given the current uncertainty of state and federal funding, should information regarding intergovernmental dependency be included in the financial report?
Financial Reporting
73%
73%
68%
79%
94%
Use (education,infrastructure,
economic…
Purpose (operating vs.capital)
Length (annual vs.multiple year)
Type (grant vs.appropriation)
Source (federal vs.state vs. primary
government)
0% 20% 40% 60% 80% 100%
26
If yes, what type of information should be included? (Check all that apply)
80%
71%
57%
75%
96%
Use (education,infrastructure, economic
development)
Purpose (operating vs.capital)
Length (annual vs.multiple year)
Type (grant vs.appropriation)
Source (federal vs. statevs. primary government)
0% 20% 40% 60% 80% 100%
Virginia
Financial Reporting
27
11%
30%
23%
28%
5% 3%
The introduction section The MD&A The Auditor's Opinion
The financial statements The footnotes The statistical section
What do you consider to be the most read portion of your CAFR?
12%
36%
20%
22%
5% 5%
Virginia
Financial Reporting
28
1%
27%
5%
46%
17%
1% 3%
The introduction section The MD&AThe Auditor’s Opinion The financial statementsThe footnotes The required supplementary informationThe statistical section
What do you consider to be the most valuable portion of your CAFR?
32%
4% 32%
25%
4% 3%
Virginia
Financial Reporting
29
34%
9%
5%
1% 5%
18%
28%
The introduction section The MD&A
The Auditor’s Opinion The financial statements
The footnotes The required supplementary information
The statistical section
What do you consider to be the least valuable section of your CAFR?
37%
13%
2% 2%
19%
27%
Virginia
Financial Reporting
30
Other (please specify)
I don’t follow GASB’s current projects
Tax Abatement Disclosures
OPEB Accounting and Financial Reporting
Lease Accounting
Fair Value Measurement
Economic Condition Reporting
Conceptual Framework – Measurement and Recognition
0% 10% 20% 30% 40% 50% 60%
Authority/Commission School Municipality County
Which GASB current project(s) are you following? (check all that apply)
Virginia
29%
22%
15%
20%
63%
7%
20%
1%
Use of Technology
Use of Technology
17%
44%
22%
17% 14%
41%
23% 22%
26%
42%
22%
10%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
In the past year In the past 1 to 5years
In the past 6 to 10years
So long ago I cannotremember
2014 2013 2012
32
When was your last IT System overhaul (not including annual system updates)?
Use of Technology
11%
19%
31%
8%
32%
11%
19%
31%
8%
31% 34%
17%
38%
11%
0% 0%
5%
10%
15%
20%
25%
30%
35%
40%
Recentlyupgraded
In the upcomingyear
In the next 2-5years
In the next 6-10years
We do not havean IT System
overhaul plannedat this time
2014 2013 2012
33
When do you plan your next IT System overhaul (not including annual system updates)?
Use of Technology
84%
16%
84%
16%
91%
9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Yes No
2014 2013 2012
34
Do you believe the increased use of technology will be necessary to keep cost under control?
Use of Technology
35
We do not use social media
YouTube
0% 10% 20% 30% 40% 50% 60% 70%
Authority/Commission School Municipality County
On which of the following social media websites does your entity have an official presence (e.g. operated and overseen by the entity)? (Check all that apply.)
Virginia
66%
57%
28%
23%
27%
Use of Technology
36
79%
21%
Yes No
Do you currently post your CAFR to your website?
89%
11%
Virginia
Use of Technology
37
10%
8%
37% 30%
15%
Yes, regarding access via a smartphone, tablet or other similar deviceYes, regarding the use of unencrypted thumb drives to transfer dataYes, to bothNoWe do not allow this type of access
Are you concerned about confidential data being lost, stolen or misused given employees’ ability to access your network through smartphone, tablet, thumb drive or other similar devices?
14% 6%
39%
30%
11%
Virginia
Use of Technology
38
31%
25% 8%
36%
Yes, multiple services availableYes, 1 or 2 select services availableNo, but a plan is in place to implementNo, with no plans to implement
Is your locality wired such that web based access is available to all citizens locality wide?
34%
23% 5%
38%
Virginia
Use of Technology
39
Other (please specify)
We do not accept revenue collectionsthrough the internet
Utility payments
School fees
Real estate taxes
Traffic fines
Business and professional licenses
0% 10% 20% 30% 40% 50%
0 - 50 million 50.1 - 250 million 250.1 million – 1 billion > 1 billion
My locality currently accepts revenue collections through the internet for: (check all that apply)
Virginia
27%
18%
55%
18%
46%
20%
14%
Use of Technology
40
14%
49%
17%
3%
17%
Whenever there is a major change to our IT EnvironmentAnnuallyOnce every 3 yearsOnce every 5 yearsWe do not complete IT Risk Assessments
How often does your entity undergo an IT Risk Assessment?
12%
50%
20%
4%
14%
Virginia
Use of Technology
41
With regards to the above question, are these assessments performed:
25%
16%
43%
16%
Internally Externally Both We do not complete IT Risk Assessments
20%
12%
54%
14%
Virginia
Debt Structure
Debt Structure
43
45%
55%
Yes No
Should the Securities and Exchange Commission (SEC) have the authority to directly regulate issuers of municipal securities and set timelines, content requirements, and have enforcement capabilities over issuers?
40%
60%
Virginia
Debt Structure
44
35%
65%
Yes No
Should the SEC be allowed to establish the form and content of financial statements for entities that issue municipal securities?
29%
71%
Virginia
Debt Structure
45
Debt Structure
46
23%
15%
30%
32%
6 months 6 month to a year
1 to 3 years No time in the foreseeable future
Do you plan to incur debt in the next…?
23%
15%
30%
32%
Virginia
Debt Structure
47
57%
9%
1%
4%
5%
24%
Funding new construction/infrastructure Refinancing current debt
Financing pension/OPEB liabilities Helping with operations
Other We are not issuing debt
What will you use your next financing for?
65%
13%
2%
2%
2%
16%
Virginia
Debt Structure
48
21%
3%
53%
23%
Increase in bond rating Decrease in bond rating
Have no effect on bond rating Have not assessed
Based on your entity’s economic outlook, where do you see your bond rating in the next 5 years?
15%
6%
64%
16%
Virginia
Debt Structure
49
2%
32%
32%
34%
Increase in bond rating Decrease in bond rating
Have no effect on bond rating Have not assessed
What affect will recording the pension liability required by GASB Statement No. 68 have on governmental bond ratings as a whole?
34%
35%
31%
Virginia
Grant Reporting & Administration
Grant Reporting & Administration
51
It did not have any effect on our entity
The ARRA grant created more efficient operations to supportARRA grant functions even after the funding ended
We found other funding to replace ARRA grant funds
We issued debt
We had to cut full-time positions or other expenditures/programs
I only hired temporary employees specifically for the ARRA
0% 20% 40% 60% 80%
Authority/Commission School Municipality County
Virginia 15%
13%
0%
28%
2%
56%
If you received ARRA grant money, how have you been able to replace that funding? (check all that apply)
Grant Reporting & Administration
52
14%
20%
61%
5%
We will no longer be subject to a single audit under the new $750,000 thresholdConsolidating the cost principlesI have not read the final grant reform rulesOther
Which of the recently revised grant reform rules are most significant to your entity:
13%
33% 48%
6%
Virginia
Grant Reporting & Administration
53
40%
38%
14%
3%
5%
We do not have a separate financial accounting and grant management departmentYes, the departments collaborate fullyYes, the departments collaborate sometimesNo, the departments do not collaborateWe do not receive grant funds
Do the financial accounting and grant management departments collaborate to ensure grant funds are properly distributed and reported?
43%
33%
13%
11%
Virginia
Budget
Budget
39.0%
61.0%
50%
42%
66%
34%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Yes No
2014 2013 2012
55
My entity experienced shortfalls in actual revenues compared with budgeted revenues.
Budget
56
To address budget shortfalls, is your entity contemplating increases in existing user or service fees?
41%
39%
20%
No Do not have a budget shortfall Yes, my entity is contemplating increasing fees
34%
47%
19%
Virginia
Budget
57
55% 37%
8%
No Do not have a budget shortfall Yes, my entity is considering new fees
To address budget shortfalls, is your entity contemplating new user or service fees?
51% 40%
9%
Virginia
Budget
58
8%
18%
5%
27%
19%
12%
11%
Increase in the upcoming yearIncrease in the next 3 yearsIncrease in the next 5 yearsDecrease in the upcoming yearDecrease in the next 3 yearsDecrease in the next 5 yearsWe have no reliance on the federal/state government
Do you believe reliance on federal/state government for funding will:
4%
19%
5%
24% 21%
19%
7%
Virginia
Budget
59
37%
7% 8%
41%
Have alreadyimplemented
Will implement in thenext 12 months
Will implement in thenext 1-3 years
We will not useoutsource companies
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Has your entity investigated any outsourcing opportunities that can reduce costs?
Budget
60
49%
4% 4%
34%
Have alreadyimplemented
Will implement in thenext 12 months
Will implement in thenext 1-3 years
We will not useoutsource companies
0%
10%
20%
30%
40%
50%
60%
Has your entity investigated any outsourcing opportunities that can reduce costs?
Virginia
Budget
8.3%
27.3%
61.0%
4.0%
11%
23%
61%
5% 3%
18%
59%
12%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Raise taxes to balancethe budget
Reduce costs to bemore efficient with a
slight increase in taxes
Maintain tax rate andreduce cost of services
Reduce taxes at theexpense of programs
and services
2014 2013 2012
61
What is the Board or Commission position on property taxes?
Budget
62
14%
46% 4%
15%
8%
13%
EducationInfrastructureTourism (e.g., river walks, coliseums)Rehabilitating existing facilitiesNew facilitiesWe are not projecting any large capital expenditures in the next 5 years
Where are you projecting to spend the majority of your capital budget in the next 5 years?
Virginia
32%
40% 2%
13%
4% 9%
Budget
63
13%
20%
14%
9%
44%
As percentage of yearly actual expenditures
As percentage of yearly budgeted expenditures
As percentage of yearly actual revenues
As percentage of yearly budgeted revenues
We do not have an annual minimum unassigned fund balance policy
How is your annual minimum unassigned fund balance policy determined?
9%
15%
21%
15%
40%
Virginia
Budget
64
41%
59%
Yes No
Virginia
Does your entity have a "rainy day fund" policy?
53%
47%
Budget
65
31%
40%
12%
17%
<10% 10-15% 16-20% >20%
What percentage does your “rainy day fund” policy plan for?
44%
44%
4% 8%
Virginia
Budget
66
55%
21%
24%
Yes, currentlyNo, not currently, but plan toNo, and don’t plan to
Is your entity currently producing multi-year revenue forecasts and/or budgets?
62% 17%
21%
Virginia
Budget
67
Yes, currently
No, not currently, but plan to
No, and don't plan to
0% 10% 20% 30% 40% 50% 60% 70%
Authority/Commission/Other School Municipality County
Is your entity currently producing multi-year revenue forecasts and/or budgets? (by Entity Type)
Budget
68
Yes, currently
No, not currently, but plan to
No, and don't plan to
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
> 1 billion 250.1 million - 1 billion 50.1 - 250 million 0 - 50 million
Is your entity currently producing multi-year revenue forecasts and/or budgets? (by Revenue)
Budget
69
45%
16%
39%
Yes, we have had some programs pushed down to the local level
No, we haven’t had any programs pushed down, but expect to
No, we haven’t had any programs pushed down and don’t expect to
Are you seeing programs that were historically state- or federally-run pushed down to be run at your local government level?
56%
6%
38%
Virginia
Budget
70
42%
10%
48%
Yes, currently No, not currently, but plan to No, and don't plan to
Outside of federal grants, does your entity budget for security and terrorism preparedness?
42%
8%
50%
Virginia
Risk Assessment & the Audit Process
Risk Assessment & the Audit Process
72
7%
11%
14% 68%
Internal auditorsFraud hotlineAnother employeeNo fraud was perpetrated against our entity in the past year
If a fraudulent event occurred at your entity in the last year, how was it caught?
6%
21%
15%
58%
Virginia
Risk Assessment & the Audit Process
73
31%
8% 61%
Yes No We do not have a fraud hotline
Our fraud hotline is an effective tool in preventing fraud and abuse?
44%
4%
52%
Virginia
Risk Assessment & the Audit Process
74
Yes
No
We do not have a fraud hotline
0% 10% 20% 30% 40% 50% 60% 70% 80%
Authority/Commission/Other School Municipality County
Our fraud hotline is an effective tool in preventing fraud and abuse? (by Entity Type)
Risk Assessment & the Audit Process
75
Yes
No
We do not have a fraud hotline
0% 10% 20% 30% 40% 50% 60% 70% 80%
> 1 billion 250.1 million - 1 billion 50.1 - 250 million 0 - 50 million
Our fraud hotline is an effective tool in preventing fraud and abuse? (by Revenue)
Risk Assessment & the Audit Process
76
23%
2%
5%
3%
5%
62%
Internal Audit Accounting/FinanceHuman Resources Outsourced providerOther We don't have a hotline
Who oversees the Fraud Hotline?
36%
6%
2% 4%
52%
Virginia
Risk Assessment & the Audit Process
77
28%
24%
3%
45%
Meet on a regular basis and provide good oversight for the audits
Only meet to review audit results
Audit Committee exists only for the auditor selection process
We don’t have an Audit Committee
How valuable and effective is your Audit Committee or similar governance committee?
44%
13% 4%
39%
Virginia
Risk Assessment & the Audit Process
78
Meet on a regular basis and providegood oversight for the audits
Only meet to review audit results
Audit Committee exists only for theauditor selection process
We don’t have an Audit Committee
0% 10% 20% 30% 40% 50% 60% 70%
Authority/Commission/Other School Municipality County
How valuable and effective is your Audit Committee or similar governance committee? (by Entity Type)
Risk Assessment & the Audit Process
79
Meet on a regular basis and providegood oversight for the audits
Only meet to review audit results
Audit Committee exists only for theauditor selection process
We don’t have an Audit Committee
0% 10% 20% 30% 40% 50% 60% 70% 80%
> 1 billion 250.1 million - 1 billion 50.1 - 250 million 0 - 50 million
How valuable and effective is your Audit Committee or similar governance committee? (by Revenue)
Risk Assessment & the Audit Process
80
34%
16%
3%
47%
Less than 100 hours
Between 100 and 500 hours
Over 500 hours
Do not have Internal Audit function
Which of the following statements best describes the allotted time your Internal Audit department assists the external auditor?
41%
17% 2%
40%
Virginia
Risk Assessment & the Audit Process
81
Less than 100 hours
Between 100 and 500 hours
Over 500 hours
Do not have Internal audit function
0% 10% 20% 30% 40% 50% 60% 70% 80%
> 1 billion 250.1 million - 1 billion 50.1 - 250 million 0 - 50 million
Which of the following statements best describes the allotted time your Internal Audit department assists the external auditor? (by Revenue)
Risk Assessment & the Audit Process
82
Providing assurance that management did not misstate thefinancial statements
Providing public confidence in the financial statements
Lending credibility to the financial statements
Compliance with grantors, which impacts future revenuestreams
Identification of areas where improvement(s) can be made
Accountability to the constituents
Validation of stewardship of resources
0% 20% 40% 60% 80%
Authority/Commission School Municipality County
The performance of an annual external financial statement and compliance audit provides clear value through: (check all that apply)
Risk Assessment & the Audit Process
83
18%
20%
33%
29%
YesNo, but we plan to in the next yearNo, but we plan to in the future (beyond a year)We have no plans to
Has your entity re-assessed its internal control environment under the 2013 COSO framework?
13%
39% 29%
19%
Virginia
Risk Assessment & the Audit Process
84
29%
56%
8% 6%
1%
We do not believe auditor rotation is necessaryWe believe auditor rotation should be assessed every 5 yearsWe believe auditor rotation should be assessed every 10 yearsWe believe auditor rotation should be mandatory every 5 yearsWe believe auditor rotation should be mandatory ever 10 years
What is your entity's opinion on the need for auditor rotation?
31%
61%
4% 4%
Virginia
Questions?
85
For more information or questions, contact:
Krista Edoff, Partner
kedoff@cbh.com