As we noted in Outsourced financial management, part 1, outsourcing a municipality’s financial management functions allows management to focus on the municipality’s goals, growth and overall management of day-to-day operations. We also discussed how outsourcing can help entities with staffing issues.
In this article, we discuss how outsourcing can help with compliance, ensuring there are checks and balances on critical systems and training:
- Fraud detection and prevention: Government agencies are major targets for internal and external fraud schemes. Some of the more significant government frauds involve small, local government entities, which often have limited separation of duties, opportunities for risk reducing oversight and scarce resources. Strategic outsourcing can strengthen internal controls and increase transparency and accountability in financial operations.
- Process improvement
- Improved Compliance. Strategic outsourcing may mitigate risks associated with compliance related matters for up-to-date evaluation and implementation plans for any changes or amendments from regulatory agencies, including the State Board of Accounts (SBOA), Governmental Accounting Standards Board (GASB) and/or the U.S. Securities and Exchange Commission (SEC). Regulatory compliance will improve as a result.
- Access to Expertise. Employees benefit from increased training and access to experienced professionals to help with day-to-day operations, recurring questions and individual growth.
- Often, municipal leaders are too busy running their governments to keep regular track of industry best practices. When you outsource accounting functions such as cash management, reconciliations, accounts receivable, accounts payable and internal controls to a third party, that company is charged with keeping abreast of these changes.
- Outsourced providers ensure timeliness and accuracy, resulting in reduced monthly cycle times.
- The processes and procedures the outsourced company implements may result in better benchmark and baseline financial processes to help meet regulatory requirements.
For more information on this topic, or to learn how Baker Tilly municipal specialists can help, contact our team.
Baker Tilly Municipal Advisors, LLC is a registered municipal advisor and wholly-owned subsidiary of Baker Tilly Virchow Krause, LLP, an accounting firm.