Finance Insights: My first Finance Director job
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January 12, 2016
From the Finance Director’s Desk …
“When can you start?” the new City Manager asked at the end of the interview. “Immediately!” I replied. Twenty-four hours later, I was in the office.
The circumstances that led to this interview are another story, but it is sufficient to say the city I had just joined was in dire financial straits. It was 1979, and the City had never heard of pooled cash. There were twenty-three bank accounts, at least one for each fund. Checks were bouncing on each account because staff were writing checks on whichever bank they thought had money in it. Or, they made daily deposits into accounts to stop more checks from bouncing. Staff had not made auditor adjusting journal entries in two years, nor had they conducted subsequent audits. The City had not produced an annual financial report since the last audit. Not one general ledger entry could be validated.
On that first day of the job, I realized why there were no other candidates for the position – the City’s financial state of affairs drove away any worthwhile contender!
I was central in the midst of a failed accounting system.
First, I had to get cash under control. I asked the Chief Bookkeeper for the prior bank statement and her reconciliations. She told me the bank statements were reconciled, and she didn’t know why the bank was not negotiating the checks. When I told her the reconciliations did nothing more than validate the statement balance, not the book balance, her response knocked me off my feet, “I’ve lived through three Finance Directors and I’ll live through you too!” I calmly answered, “Oh, you may live through me alright, you probably will outlive me, but it just won’t be here if we don’t get these bank accounts reconciled to book balances!”
Three months later, she took an early retirement and moved to South Carolina.
I finally reconciled those bank accounts to book balances, but only after an excruciating eighteen hours each day manually recreating two years’ worth of the entire general ledger for the City’s funds. This was 1979: neither Excel nor Lotus 1-2-3 were invented yet. In fact, I didn’t even have a desktop computer! The accounting system was a Burroughs B80 posting machine that posted onto individual ledger cards.
After a painful year of six-day workweeks and late nights, the City received the Government Finance Officer Association’s Certificate of Compliance for Financial Reporting (the former name of today’s Certificate of Excellence for Achievement in Financial Reporting). Read – clean audit opinion! Cash was pooled, internal controls were robust, a new chart of accounts was implemented, all accounts were reconciled, and a computerized accounting system was deployed.
I was now the commander of a lean, mean accounting machine! Soon, I worked five-day, forty-hour, weeks. I could take vacations, and actually let the office run on its own.
The lesson learned, and what today’s post is really about, is that there are no great successes without pain and struggles. I believed that then, I believe it today. Our successes, comes with great costs. This is as true in government finance as it is in other fields.
Charlie Francis is a municipal finance expert. He has more than forty years of local government financial management experience in both the public and private sector, including twenty years of experience as a Chief Financial Officer. Most recently, he served as the Director of Administrative Services and Treasurer for the City of Sausalito where he earned the unofficial title of “OpenGov super user”. He has also served as a finance manager for the Town of Colma, CA and as CFO and acting City Manager for the Cities of Indian Wells, CA and Tracy, CA.
Category: Government Finance