2011 government benchmarking study

2011 Government

Benchmarking Study Results Overview

Cherry, Bekaert & Holland, L.L.P. Government Services Group

Russell Coleman, Partner John Montoro, Partner

Kurt Miller, Partner Robert Bielat, Partner

200 South 10th

Street Suite 900 Richmond, VA 23219 804.673.4224

1934 Old Gallows Road Suite 400 Tysons Corner, VA 22182 703.506.4440

222 Central Park Avenue Suite 1400 Virginia Beach, VA 23462 757.456.2400

www.cbh.com

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October 12, 2011

Welcome to the inaugural report of the CB&H Government Benchmarking Survey.

When we launched the study earlier this year, we set out to collect, analyze and distribute different viewpoints regarding how

local government financial leaders are dealing with key financial and operational issues during the economic recovery.

Our goal was to present the findings in the hope that this information will allow government entities to compare their own

performance and planning with similarly sized entities across the Southeast. Survey respondents represent government entities

throughout Virginia, North Carolina, South Carolina, Georgia and Florida.

As revenues fall and local demands continue to rise, this information can be critical to planning and budgeting for the year

ahead. We hope this report will help you better understand how your peers in the region are responding or are planning to

respond to a wide range of current issues.

Our thanks go out to the cities, towns, counties, school boards, authorities and agencies throughout the Southeast that

contributed to this study, as well as the associations that encouraged their members to participate. Moving forward, we will be

conducting this survey on an annual basis, and I look forward to reporting next year’s results.

Sincerely,

John Gilberto, CPA

Industry Leader, Government Services Group

Table of Contents

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Table of Contents

Overview _____________________________________________________________________________________ 4

Respondent Information __________________________________________________________________________ 5

Workforce and Benefits __________________________________________________________________________ 6

GASB and Transparency _________________________________________________________________________ 9

Use of Technology _____________________________________________________________________________ 12

Green Initiatives _______________________________________________________________________________ 14

Debt Structure ________________________________________________________________________________ 18

Infrastructure _________________________________________________________________________________ 21

External Audit _________________________________________________________________________________ 23

ARRA _______________________________________________________________________________________ 24

Budget ______________________________________________________________________________________ 28

Government Benchmarking Study Results Overview

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Overview

The 2011 CB&H Government Benchmarking Study was

fielded in July and August 2011. The survey analysis

includes aggregated responses from 143 government

financial and operational leaders throughout the Southeast.

This is the first of what will be an annual survey, designed

to capture and identify significant trends on timely issues

relevant to local government entities. This year’s survey

focused on the following issues:

Workforce and benefits – How has the new

economy impacted local government employees?

GASB and transparency – What affect has

intergovernmental dependency and compliance with

new GASB standards had on the development of

financial reports?

Use of technology – Are local governments staying

‘up-to-date’ with regard to IT systems?

Green initiatives – Are local governments

considering energy-efficient green initiatives and

where are they using them?

Debt structure – What impact is the economy having

on debt financing and bond initiatives?

Infrastructure – Are local infrastructure assets being

adequately maintained?

External audit – Do your auditors understand your

business, and are external audits resulting in

beneficial management letters?

ARRA – Is the American Recovery and Reinvestment

Act of 2009 considered a success?

Budget – How are local governments addressing

budget shortfalls?

Highlights Based on Survey Results

Employee benefits are not the same selling point they

used to be

A growing concern for the importance of transparency

with regard to intergovernmental dependency

The importance of technology as a way to help

control costs

74% of respondents are on Facebook

Green initiatives are in

ARRA had a favorable impact

Despite budgetary concerns, stable tax rates are

expected for the near term


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Respondent Information

Type of Entity

By Title

Size of Entity (by number of employees)

Size of Entity (by revenue)

36%

41%

12%

8%3%

County

Municipality

School

Authority/Commission

Stand Alone Enterprise Fund

1%

53%25%

21%

Elected Official

CFO/Director of Finance or

Equivalent

Controller/Accounting

Manager or Equivalent

Accounting Staff

3%

24%

34%

39%

0 – 25 employees

26 – 250 employees

251 – 1000 employees

>1000 employees

10%

36%44%

10%

0 – 10 million

10.1 – 100 million

100.1 million – 1 billion

> 1 billion


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Workforce and Benefits

It is easier today to find qualified candidates for vacant financial and accounting positions compared to two years ago.

Has your staffing level for financial and accounting positions over the past two years:

We have been able to adapt to the reduction in our workforce by finding ways to do things more efficiently.

23%

53%

15%

7% 2%Fully Agree

Partially Agree

No Opinion

Partially Disagree

Fully Disagree

6%

46%

48%increased?

decreased?

stayed the same?

16%

37%23%

20%

4%Fully Agree

Partially Agree

No Opinion

Partially Disagree

Fully Disagree


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The reduction in our workforce has increased the risk of fraud in our entity.

In the next budget cycle, do you anticipate that the number of filled financial and accounting staff positions will:

Has the benefits package you offer to new employees decreased in value over the last two years?

9%

29%

24%

19%

19%

Fully Agree

Partially Agree

No Opinion

Partially Disagree

Fully Disagree

9%

15%

76%

increase?

decrease?

stay the same?

69%

31%Yes

No


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Have other post-employment benefits (OPEB) been reduced following the adoption of GASB 45?

30%

52%

18%

Yes

No

N/A


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GASB and Transparency

New GASB standards issued over the last 5 years have improved overall financial reporting for my government.

GASB 54 will improve understanding of the makeup of governmental fund balances.

The current financial reporting model is too long and complicated.

13%

39%

15%

24%

9%Fully Agree

Partially Agree

No Opinion

Partially Disagree

Fully Disagree

21%

52%

13%

10%

4%Fully Agree

Partially Agree

No Opinion

Partially Disagree

Fully Disagree

15%

40%17%

22%

6%Fully Agree

Partially Agree

No Opinion

Partially Disagree

Fully Disagree


- 10 -

The current financial model is of value to elected officials and constituents.

Do you currently post your CAFR to your website?

Our fraud hotline is an effective tool in preventing fraud and abuse.

4%

38%

11%

32%

15%

Fully Agree

Partially Agree

No Opinion

Partially Disagree

Fully Disagree

86%

14%

Yes

No

3%

20%

73%

2% 2%

Fully Agree

Partially Agree

No Opinion

Partially Disagree

Fully Disagree


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Given the current uncertainty of state and federal funding, information regarding intergovernmental dependency should be included in the financial report.

Participation in the GFOA (or ASBO) certificate program has a positive impact on the perception of financial accountability.

How valuable and effective is your Audit committee?

Meets on a regular basis and provides good oversightfor all the audits.

Only meets to review audit results.

Audit committee exists only for the auditor selectionprocess.

We don't have an audit committee.

0-25 employees 26-250 employees 251-1000 employees >1000 employees

76%

24%

Yes

No

46%

34%

16%

4% 0%

Fully Agree

Partially Agree

No Opinion

Partially Disagree

Fully Disagree

45%

21%

21%

13%


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Use of Technology

When did you last upgrade your IT system?

When do you plan to upgrade your IT system?

Do you believe the increased use of technology will be necessary to keep cost under control?

91%

9%

Yes

No

26%

42%

22%

10%In the past year.

In the past 1 to 5 years.

In the past 6 to 10 years.

So long ago I cannot

remember.

34%

17%

38%

11%

Recently upgraded.

In the upcoming year.

In the next 2 to 5 years.

In the next 6 to 10 years.


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Which of the following social media websites does your entity use?

YouTube

LinkedIn

Twitter

Facebook

County Municipality School Authority/Commission Stand Alone Enterprise Fund

106

58

35

31


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Green Initiatives

Do you currently have any green initiative projects?

If “No”, do you plan on implementing any green initiative projects in the future?

10%

3%

23%

6%

58%

Yes, in the next 5 years.

Yes, in the next 5-10 years.

I already have green initiative projects implemented.

No, I do not plan on implementing any green initiativeprojects in the future.

N/A

78%

22%

Yes

No


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Why did you go green?

How long has your green initiative project been implemented?

Public image.

The environment.

Lower operating cost.

N/A


14%

43%13%

8%

22%

Less than 1 year.

1-3 years

3-5 years

5 years or more

N/A

47

75

67

31


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Where have you implemented your green initiatives?

Were you able to obtain the same number of bids for projects with green initiatives as those without?

New construction

Rehab of existing facilities

Utility cutbacks

Recycling

Office initiatives

N/A


6%

33%

1%

60%

Less bids

The same number of bids

More bids

N/A

26

69

92

61

65

65


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Have benefits outweighed the costs of the green initiative projects?

Did your green initiative project create goodwill for your entity?

40%

20%

40%Yes

No

N/A

60%

7%

33% Yes

No

N/A


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Debt Structure

Do you plan to incur debt in the nextN?

What will you use your next financing for?

Funding newconstruction/infrastructure

Refinance current debt

Finance pension/OBEP liabilities

Operations

Other

N/A


16%

16%

20%

48%

6 months

6 month to a year

1 to 3 years

Not in the foreseeable future

36%

2%

1%

4%

43%

14%


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Do you use derivatives to hedge your interest rate?

Is your derivative to hedge your interest rate currently an:

Will you use derivatives to hedge your interest rate on future debt issuances?

8%

92%

Yes

No

1% 6%

93%

Asset

Liability

Do not use

3%

97%

Yes

No


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What is your outlook on bond ratings in the future based on the current state of the economy?

13%

16%

71%

Increase your debt rating.

Decrease your debt rating.

Have no effect on your debt

rating.


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Infrastructure

Do you feel that the organization’s insurance coverage is adequate for capital assets?

Do you feel that existing infrastructure assets are being adequately maintained?

Are you currently extending the lives on your existing infrastructure assets more than in the prior years?

92%

8%

Yes

No

73%

27%Yes

No

60%

40%

Yes

No


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Would you consider your existing infrastructure outdated?

34%

66%

Yes

No


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External Audit

Which of the following statements best describes how well trained your external auditor’s staff are in regards to financial statement auditing, OMB Circular A-133, and financial reporting?

Which of the following best describes the allotted time your internal audit department assists the external auditor?

Which of the following best describes your views of any management letter comments that have been provided to you over the past three years?

83%

15%

2%

Well trained and

knowledgeable.

Somewhat trained.

Inexperienced and not

well trained.

26%

22%

4%

48%

Less than 100 hours.

Between 100 and 500

hours.

Over 500 hours.

Do not have internal audit

function.

36%

46%

6%

12%Very beneficial.

Somewhat beneficial.

No value at all.

Did not receive

management letter.


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ARRA

Have you received ARRA funding?

What percentage of your revenue did/does the ARRA grant make up?

75%

25%

Yes

No

54%

17%3%

1%

25%

Less than 5%

5%-10%

10%-25%

25% or more

N/A


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Check all of the following ways the ARRA grant was/is used for:

Do you feel that the ARRA grant accomplished its purpose?

Maintain positions

Create new positions/programs

Increase operations

Construction

Other

N/A


52%

15%

33% Yes

No

I do not know or N/A

35

39

66

23

31

42


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Do you feel the ARRA grant has benefitted/will benefit you and other ARRA grant recipients in the long run?

51%

17%

32% Yes

No

I do not know or N/A


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How will you replace ARRA grant money when the funding ceases?

I only hired temporary employees specificallyfor the ARRA.

We will have to cut fulltime positions or otherexpenditures/programs.

We will issue debt.

We will find other funding to replace ARRAgrant funds.

The ARRA grant created more efficientoperations to support ARRA grant functions

even after the funding has ended.

It will not have any effect on our entity.

We do not know.

N/A


34

24

4

37

30

1

13

22


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Budget

My entity has experienced shortfalls in actual revenues compared with budgeted revenues.

To address budget shortfalls, is your entity contemplating an increase in existing user or service fees?

To address budget shortfalls, is your entity contemplating new user or service fees?

66%

34%Yes

No

47%

29%

24%Yes

No

N/A

36%

38%

26% Yes

No

N/A


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The organization is willing at this time or in the near future to consider a more aggressive investment strategy to increase investment earnings.

Do you believe reliance on federal/state government for funding will:

Increase in the upcoming year.

Increase in the next 3 years.

Increase in the next 5 years.

Decrease in the upcoming year.

Decrease in the next 3 years.

Decrease in the next 5 years.

N/A


3%

24%

29%13%

31%

Fully Agree

Partially Agree

No Opinion

Partially Disagree

Fully Disagree

17%

6%

36%

28%

2%

5%

6%


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Has your entity investigated any outsourcing opportunities that can reduce costs?

What is the Board or Commission position on property taxes?

Raise taxes to balance thebudget.

Reduce costs to be more efficientwith a slight increase in taxes.

Maintain tax rate and reduce costof services.

Reduce taxes at the expense ofprograms and services.

N/A


55%

5%

13%

27%

Have already

implemented.

Will implement in the next

12 months.

Will implement in the next

1-3 years.

We will not use outsource

companies.

8%

59%

12%

3%

18%

2011 government benchmarking study

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