DIXON – An 18-week review of Dixon’s financial controls could begin in just a few weeks.
In the coming weeks, officials will meet with Sikich, a Naperville-based accounting firm, to complete an agreement to study the city’s financial controls and cash management procedures.
The meeting will happen after the Dixon City Council and city staff have had a chance to review the initial proposal, Mayor Jim Burke said.
The review’s purpose, Burke said, is to determine whether the city’s financial controls systems have any weaknesses and, if they do, to possibly get recommendations on how to fix them.
“I’m not expecting any problems,” Burke said. “... But we don’t want to take any chances on anything.”
Since Finance Director Paula Meyer was hired in September 2012, in the wake of the arrest of former Comptroller Rita Crundwell, the city has changed much about the finance department and its separation of duties.
Because of their size, it’s more difficult for local governments – like Dixon – to have ideal financial controls and separation of duties, said Mike Peddle, an associate professor in the division of public administration at Northern Illinois University. He focuses on, among other areas, public finance.
“There’s absolutely no question about that,” Peddle said. “Yes. It is. ... The segregation of duties, which is one of the things you look for in financial control, is much more difficult in a smaller organization.”
Setting up adequate and efficient financial controls is not impossible for small local governments or small organizations.
Although Peddle wouldn’t speak to specifics about what Dixon should do, much of what he recommended for small municipalities or organizations already has been implemented.
Dixon has added an employee to its finance department since Meyer was hired in 2012. In fact, hiring a finance director was among Peddle’s key recommendations.
Five employees now work under Meyer, City Administrator David Nord and City Clerk Kathe Swanson. Meyer has limited, by design, her ability to update or input information into the city’s accounting system.
DeKalb went without a finance director until about 2 years ago, Peddle said, and during the lead-up to hiring one, there was some push back.
“I had assured people that the money will pay itself back,” he said.
In addition to suggesting a finance director, Peddle recommended that small organizations make their money traceable and don’t allow for a single employee to be the one who takes money in and also balances the checkbook.
One of the most important things, Peddle said, is an ongoing monitoring of financial control by the governing board.
“You need to know where you’re at from a cash-flow perspective and a budget perspective,” he said.
During City Council meetings leading up to the end of the past fiscal year, Meyer made regular presentations to the council about the status of the budget and the recovery of funds from the sale of Crundwell’s assets and the settlement with the city’s former auditors and bank.
But bringing in Sikich, Meyer said, could bring a new perspective to the city’s financial controls and result in specific recommendations for changes or ideas.
“Ultimately, the idea would be that they would come in and have some other ideas on how the city could implement some things, given the staffing level and the software system,” she said.
The review breakdown
The Sikich proposal estimates a review could take 17-18 weeks.
• Weeks 1-5: Gather information on the department's organization, collecting necessary documents and conducting interviews with management and staff.
• Weeks 6-10: Interviews with stakeholders that can "impact the strategic framework and long-term aims for finance and cash management services." Continue gathering and analyzing data and information collected to this point.
• Weeks 11-12: Combine collected data and information and identify areas of strength and weakness. Review the hardware and software used in the finance department and outline possible refinements.
• Weeks 13-14: Refine analysis of department's organization and develop alternatives and options for refinement. Submit findings and status of research for comment and review.
• Weeks 15-16: Review findings and comments and feedback from city. Make adjustments and refinements if needed and submit draft for preliminary review and gather feedback from city.
• Weeks 17-18: Sikich and city will review and refine the findings and recommendations and prepare a final report.