Dalton Considers Hiring Third-Party Accounting Services
DALTON, Mass. — With the increased complexity of managing accounting operations and mandated compliance tasks, town officials are mulling if hiring a third-party accounting service would be fruitful.
Town Manager Eric Anderson informed the Select Board on Monday that the town is about two years behind on financial reconciliations and related reporting.
Anderson will continue exploring third-party accounting services and will present cost estimates to the Select Board, which will then decide whether to proceed with hiring.
He highlighted several of the steps in reconciling the town's accounts, including reconciling bank account activity with the tax collector's receipts, aligning outgoing expenses and bills with the ledger, and reconciling the town accountant's books to the town treasurer's records.
"We're doing most of the process. We're just not closing it out and frankly, I honestly think at this point, we don't have the manpower in that office to do that system," he said.
Further delaying the process is the town's outdated accounting software that requires staff to duplicate efforts, because not everybody's on the same system.
"That's part of the reasons why I'm pushing, eventually for technological solutions, and I want to get payroll under control, because we're just spending too many labor hours doing simple things," Anderson told the board.
The town is going to need to hire an accounting firm or someone who is a really good municipal accountant/treasurer, to come in on a part-time basis, he said.
Anderson said he has put out feelers to accounting firms and had conversations with three. However, the problem is that the town is out in the "boonies," and its financial software is out of the mainstream, so most qualified people would have to relearn all the operating software.
This is a complex job that take a lot of time and there are only so many hours in a day with the existing staff, Anderson said.
If the town can automate some processes, it will free up about one full-time person. Once the town gets payroll under control, it will have a chance to keep up, he said.
"I do think that part of the reason I wanted to go to a better payroll process is to get back some of that time we need for the rest of the things we need to do in the finance office," Anderson said.
"So, it'll be an ongoing process. It's not something you're going to do overnight. Hopefully in a year it'll be better and we'll be in reasonable shape."
Ultimately, the town needs to switch to an accounting software package that does a better job wrapping in all of the departments and reduces the amount of time it takes, Anderson said.
"The goal is to get the process more automated so we can handle it with the existing staff. That's my goal," he said.
"I just don't think we have a chance now, because the reality is, a lot of things have moved on, the government's a lot more difficult in terms of all the reporting requirements and the requirements on the personnel, and we really haven't just changed processes in a long time."
This year, the town needs to be audited by a certified public accountant, which it is required to do every other year, so it is important that its books are audit-ready, he said.
Typically a CPA charges between $185 and $225 an hour and the cost will depend on how long it takes them to get the books straightened out. Anderson cautioned in could be in the hundreds of hours.
He believes the town will likely need to hire an outside firm for two main reasons: to assist with the audit and to address the continued difficulty in attracting qualified accountants because of insufficient compensation.
"I do think long term, we're going to need additional assistance there, but I don't think it's going to last forever," he said.
"[However,] I think we're going to have to take a hard look at the accountant position and see why we're not attracting any really solid candidates for that. Part of that is compensation, but the question is, can we actually afford to pay more for that? And that's a question we're going to need to wrestle with a little bit."
The town's accountant longtime account, Sandra Albano, retired in October after 25 years. The newly hired replacement resigned after only a month, prompting Albano to temporarily return and assist the town.
"I don't disagree that we need the help sooner rather than later. And frankly, I think Sandy kind of wants to be retired. That's why she retired," Anderson said.
"She's still working here — trying to keep a lid on things is a testament to her, and we would certainly be in much worse shape if she was still doing that. So, I have no issue with hiring a third party accounting firm to keep us going temporarily and to catch us up. I think that's the correct idea."
Tags: accounting, audit,
