By Amanda Baillie, For the Herald/Review
After a two-decade career at Cochise County, finance director Lois Klein can certainly claim to be going out on a high. Her department has just ended its annual audit without a single finding for the second year running – an achievement virtually unheard of in government.
“It’s the first time for the County ever that it’s happened,” said Klein, who recently retired, but is acting as a part-time consultant until her replacement is found. “There is only one other county in Arizona that has achieved this, and that’s Yuma.”
While the County’s clean audit may not be a huge deal for the average citizen, it does in fact have consequences for local residents.
“It will save taxpayer dollars,” explained Klein. “When you have an audit with no findings the cost of the audit is halved. Because we are rated as low risk, fewer programs need to be audited. It also allows us to secure better interest rates and financial terms, should we ever need to borrow any funds. It’s like having a high credit score.”
A dedicated team and a lot of hard work has allowed the Finance Department to achieve its perfect audit score, Klein believes.
“I’ve worked really closely with my team and we’ve worked really hard to get here. There has been a lot of hard work and training,” she said, adding the auditors now “fight over who will be on our audit”.
The primary role of the Finance Department is to support the Board of Supervisors, the County Administrator, County and Judicial Departments, as well as the public. The team manages a total of 200 separate funds, which includes everything from the $81.4 million general fund, to accounts amounting to just a few hundred dollars, such as the St. David Water District. The County’s current annual total budget is $186.3 million.
Just 10 people make up the department, which places it at the same staffing level as in 1997. Right now, the County is going through its annual budgeting process, which needs to be completed by the end of June. Each department submits its requests for additional funding, called decision packages, which are then reviewed by the Board of Supervisors for approval, or denial. It is the job of the budget team to provide the Board with recommendations, as well as to make forecasts on larger general revenue sources.
“We provide the data to the policy makers so they can understand the bigger picture,” explained David Raber, Administrator over Financial and Technological Services and Director of Information Technology. “Lois has worked hard for the 12 years she has been the finance director to improve our processes and to develop the staff.”
The knowledge and experience of the finance team has helped the County to better face budgeting challenges, including the management of its Public Safety Personnel Retirement System (PSPRS) liability. The County has a projected liability of more than $28 million, which it has to pay into the PSPRS in the future to meet the pension needs of its current public safety personnel. Government entities across the country are also in the same position.
“We have that booked as a long-term liability, as required by the Governmental Accounting Standards Board, and you’ll find that is the case across the nation,” Klein said.
During fiscal year 2014/15, the County paid an additional $2 million into the PSPRS fund as a cost savings strategy. Efficiencies such as these have allowed the County to reach an enviable position of zero bonded debt. While the County currently owes $1.2 million on a capital lease used to purchase new communications equipment, Klein said it is due to be paid off in September this year.
The state-of-the-art microwave and radio technology was believed critical to public safety, and will significantly improve the ability of the emergency services to provide more efficient and speedy coverage across the region. Arizona law caps local government spending limits and, even though the County had the money to buy the equipment, it may have taken it over the allowable threshold. The County therefore had no alternative but to take out a capital lease, Klein said. When the capital lease for that equipment is paid off, Cochise County will be one of only two counties in the state to be debt free – the other is Coconino.
That current status means the new financial director – interviews are currently being held with candidates from within and outside of Arizona – has a healthy foundation to build upon.
But the department is not without its challenges. In the past decade, mandates and regulations imposed by federal and state lawmakers have required a significant increase in accounting labor, with no additional funding, Klein said.
“Our staffing levels are the same as in 1997 but obviously we’re doing more with less. We are working additional hours on a daily basis to meet all the requirements,” she said. “We have also been losing population which means the tax base decreases. But we are trying to find new ways to automate and improve things.”
Raber added, “We have to be creative and we are figuring out more ways to leverage technology so that we can free up more time.”
In spite of some hurdles along the way, Klein says she is proud of what has been achieved and the dedication of the staff, citing a time when the automated payroll system crashed in 2008, leaving the team to manually input all of the data for the then 1,200 employees before hand delivering their checks the same day.
“It’s been a wonderful ride,” she said. “I’ve loved working for the County and I’ve loved the staff. It’s the reason I’m back here to help. I’m especially proud of what we achieved with the audit. What a way to go.”
By The Numbers
10 – number of Finance Department staff
20 – number of years Finance Director Lois Klein has worked at Cochise County
200 – number of separate funds managed by the department
866 – number of payroll checks issued every two weeks
81,454,005 – amount in dollars of the 2015-16 General Fund
186,365,548 – amount in dollars of the 2015-16 total budget