Local government finance

Written by: Curtis Coonrod [Revised: 3/11/22] “How do I know I can trust all these people?” A newly-elected official once asked us that question. He inherited staff from his electoral opponent, the former officeholder. He wanted continuity of operations, so he did not want to fire everyone. He knew these people from his time on the fiscal body. Essentially, he trusted them, but he did not hire them. He did not want any of them to get him into trouble. Here was our advice: Even if you think you know people, you don’t. Besides, public office is a public trust. Your job is not simply to trust people you know but to put in place sound security systems to safeguard […]

Written By: Curtis Coonrod [Revised: 10/19/2021] 1. Reallocate Local Income Tax (LIT)  Townships generally receive a share of local income tax with the revenue being budgeted in one or more funds. However, the Township Trustee is not bound by that portion of the budget. In fact, the Trustee has the authority to make reallocations such as redirecting LIT revenue during the year. This is done ideally by obtaining a Board resolution, though it is not a requirement to do so.  For example, suppose that one half of your township’s LIT revenue is budgeted in your Township  Assistance Fund with the other half in the Fire Protection Fund. The Trustee can effectively redirect some of the LIT revenue so that only […]

It seems every few months we read about a government clerk who has siphoned off thousands of dollars. We shake our heads and ask ourselves how could that be allowed to happen, but, be honest, how do you know it is not happening right now in your own unit of government? You may answer that you know and trust your people. But the people you read about were also trusted employees until they were caught. Sadly, trust is not an accounting control. Sometimes the auditors make these discoveries, but not often. A smart crook will always leave behind convincing documents for audit purposes. Usually, when a person is caught, it is a result of an anonymous tip, a mistake on […]

There are two kinds of ghost employees – do you know which kind is more dangerous? The kind of ghost employee that gets the most publicity is the least dangerous. We have all heard of the occasional government official who puts a friend or relative on the payroll, but does not expect that person to show up and work. Obviously that is unethical and probably illegal. But it is not a danger to you, as a public official, because you already know about it. If you are doing it, you know you are doing it. Granted, you may not be aware a trusted employee may be doing some personal or political work while he is on government time. Technically, that […]