An independent auditor’s report (PDF) of the city’s finances during fiscal year 2006 was recently made available by the Springfield Finance Control Board. Titled unassumingly, "Report on Examination of Basic Financial Statements," the report was apparently completed late last fall by Wakefield-based accountants Powers & Sullivan. The November 17, 2006 cover letter states in part, "Our responsibility is to express an opinion on these financial statements based on our audit."
"An audit," the letter continues, "includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation."
In other news, city officials made moves recently to come into compliance with a 17-year-old state law that would eliminate some personnel duplicities in City Hall and the School Department. Such moves, no longer merely a response to crisis, are a sign of increasingly sophisticated attempts to bring local government back in line with the law, and even perhaps closer to best practices.
At last week’s control board meeting, a draft document (Word doc) was presented as part of a process toward implementing a municipal fiscal policy. Deputy executive director Stephen Lisauskas said that no prior documentation exists, so this policy-setting appears to be from scratch. The document is perhaps a dry read but it is no less fascinating for it, especially for those people who may be intimately familiar with the fiscal screw-ups of years past, and some of the games the city seemed to play with itself to make it appear to have more money than it did.
For example, "Budget Policy Eight" states, "The City Auditor shall provide to the Mayor and City Council a monthly report of revenues and expenditures at the line item level," adding that this policy "provides a tool for the Mayor, City Council and the public to monitor expenditures and ensure that revenue and expenditure projections are being met. Provision of this information is necessary to ensure accountability and prevent problems from going unnoticed by the public and policymakers."
And another favorite, "Debt Policy Eight," which says, "The term of debt issued to finance capital improvements or procurements may not exceed the useful life of the asset or improvement so financed," which "ensures that debt will not be outstanding beyond the useful life of the asset it purchased or improved. This is consistent with best practices in municipal finance and prevents future taxpayers from paying for capital investments from which they are not benefiting."
I invite readers to find other gems in the draft document and post them here in the comments.
