Small government monitoring project can help smaller government stay open opinion west la college financial aid

Last month, I was given the key to the town of matoaka in mercer county. This key was neither a ceremonial award, nor a gift to me as a special honorary citizen. It was the actual key to the town hall. Without prior notice, the town officials were walking away from mounting debt and an inability to pay their bills and simply handed over the key. This drastic action caught many by surprise, and still remains an ongoing issue to try and resolve by my office, the mercer county commission, and most importantly, the residents of matoaka.

The struggling finances of small incorporated towns in west virginia is by no means new to this state, and has been a topic of numerous news stories over the past decade.

The cause of the financial struggles of these towns will remain the subject of many policy discussions and decisions over the years.Auditor’s office however, my concern as state auditor is how did this situation get to the point that a town merely locks the doors and walks away without any prior warning to head off this type of action.

The logical warning bell should have been the town’s financial audit. In west virginia, all municipalities are required by law to have an annual audit of their finances. This did not occur in matoaka, and apparently had not occurred for several years. As I discovered upon taking office last year, the smaller class III and class IV towns are unable to financially afford to pay for audits. As a result, the very entities that are struggling financially and in need of an audit, often choose to forgo paying for an audit and sink more and more quietly into potential bankruptcy. The lack of financial transparency results in what occurred last month in matoaka.Pilot project

This is unacceptable. It is more costly to the residents of these struggling towns, the county commissions and the state to have to financially bail out these towns, than it would cost to do a timely audit that identifies financial struggles and sends warning bells. Yet, when faced with a stack of vendor bills, and not enough money to pay them, most towns logically decide not to spend $3,000 to be told what they already know—they’re broke.

In an effort to address this growing disparity, my office created a pilot project last year, in partnership with dean javier reyes and the WVU college of business and economics, to provide for specialized review and auditing of these smaller towns. The pilot project, known as the small government monitoring project, utilized graduate-level accounting students at WVU to apply real-life audits of these small towns as the source of their training and instruction.Pilot project

The students received classroom instruction and standardized working papers within an audit engagement management software system. They applied audit-like concepts on actual governments, while gaining practical experience and exposure to these widely used engagement management software systems. The work is supervised and reviewed by the classroom instructor and the state auditor’s office staff.

Upon completion of the student’s examination of a town’s finances, the state auditor’s office then utilized the collected financial information to provide a timely audit and examination of these struggling town’s finances. The cost will be significantly lower to the town than an actual audit by a private accounting firm, and will provide a timely snapshot of the town’s finances, hopefully before any extreme measures are taken.Pilot project

The success of this pilot project has spread rapidly, with additional colleges and universities seeking to join. More importantly, the potential availability of the small government monitoring project has spread among the smaller class III and class IV towns in the state, with many seeking to sign-up. Given this growing demand, I have worked with the WV municipal league and introduced legislation this session to expand this program.

Senate bill 479, sponsored by sen. Ed gaunch, R-kanawha, codified the small government monitoring program under the state auditor’s office. The bill allows municipalities and counties to apply on an annual basis to participate in the program. It additionally allows the state auditor to enter into agreements with other institutions of higher education in the state to engage their accounting students.Pilot project finally, senate bill 479 restructures the potential costs associated with audits by private accounting firms to remove some of the financial obstacles associated with obtaining annual financial audits. Fortunately, the success of the pilot project made its way to the legislature, and senate bill 479 was passed and approved on march 7, 2018.

The expansion of this project across the state is a hopeful sign. I firmly believe transparency is the true window to administering successful government entities, and audits are a vital tool to that transparency. The state auditor’s office recently launched the website wvcheckbook.Gov to give everyone real-time access to the state’s finances. If you haven’t already visited this site, I hope you will. In the future, our goal is to add municipalities and county finances to this website and provide even more transparency for our citizens.Auditor’s office this is a real opportunity for financial accountability through real-time transparency. Perhaps then, the handing over of keys to the town hall will once again be for ceremonial purposes only.