Bethany Beach is looking into adding another layer to its existing audit controls. The town’s Audit Committee held a meeting with accountant Craig Boyce on Thursday to consider what Boyce might do as a secondary oversight on town finances, in addition to the town’s existing auditing firm.
Audit Committee Chairman Don Doyle said that one of the results of the audit firm’s first audit of the town, in 2005, was the suggestion that greater — and more independent — oversight could be achieved with two separate auditors reviewing the finances. It was a current standard of practice in most municipalities, he said.
There was also a suggestion in the 2005 review that perhaps adding an internal auditor might serve the town well, too. Doyle said town staffing wasn’t such that using a staff member for internal auditing was really possible, and the cost of hiring a third party to do the job might be more than the town should shell out for a little extra oversight.
That’s how Bethany Beach July 4th Parade Chairman Phil Rossi came into the picture. The retired accountant and auditor already has desk space and a computer in the town hall offices for his use in organizing the annual parade. With his background, he was a natural choice. And the price can’t be beat: Just as with the parade, he’s volunteering his time to perform the duties of an internal auditor.
Rossi started on that work in January, checking on the town’s petty cash as a quick first step, and proceeding to develop a checklist to review the town finances periodically.
While neither is required by newly instituted Government Accounting Standards Board (GASB) requirements — they’re satisfied by the town’s existing audit — committee members were in agreement that it was best to be proactive and make sure that all aspects of the town’s finances were being adequately reviewed by neutral auditors.
That’s another benefit they cited in Rossi’s unpaid job: since he isn’t paid by the town, it affords him an extra level of objectivity, committee members said.
The meeting with Boyce on Feb. 9 was a preliminary one — designed to give him some idea of what the town might need from him and when. To the latter question, and in the midst of a busy tax season for many accountants, the committee said the timeframe would be less than immediate and not push to cover this year’s budget review process that leads up to an April 1 start for the town’s new fiscal year. In the future, however, that secondary review would become part of the annual review process.
Expenses for hiring Boyce for the additional oversight have yet to be determined. Town Manager Cliff Graviet had advised Doyle to keep the expense as low as possible, Doyle explained, ideally under $10,000 to $15,000, and Boyce said he thought $10,000 would be more than enough.
Boyce was to meet with Graviet to get an idea what risk areas he might need to target, as well as the scope of his overall duties and return to the committee with a proposal for his work in the near future.
He was also to meet with Rossi as that work proceeds, to help the town’s new volunteer internal auditor get a handle on his new job.
Between the two of them, the town hopes not only to identify any problem areas in the town’s financial dealings but also to improve the efficiency of the financial oversight process itself, by determining exactly how much oversight should be accorded to risk areas both large and small.