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NLV audit: Not enough staff to keep the books

Independent auditors have confirmed what some already suspected: North Las Vegas just doesn’t have enough staff to keep an adequate eye on the city’s books.

The sole finding to emerge from the city’s latest financial audit details a lack of available accounting personnel needed to “review transactions and ensure that journal entries are appropriately recorded” in advance of the city’s annual financial report.

The 160-page 2013 audit, presented to City Council members at a meeting Dec. 4, also highlights staff difficulty in reviewing and reconciling supporting documents needed during the audit process and asks city leaders to consider adding to a skeleton crew of 19 full-time employees in the city finance department.

Report authors at Las Vegas-based Piercy Bowler Taylor & Kern go on to suggest that the city focus on improvements to automated financial reporting tools and department-wide oversight.

“We have to be able to test not only (city) financial statements but also client laws, regulations, contracts and award agreements, specifically federal grants,” auditor Jim Andrus told City Council members this month. “I’m happy to report no findings relative to federal (grant) awards. That’s an improvement over previous years and a very positive thing for the city.”

Financial report findings published in 2010 and 2011 pointed to concerns over the cash-strapped city’s ability to comply with state and federal grant fund procedures and twice raised the alarm over management failures to cross reference vendors against a federal no-hire list.

The city’s 2009 audit picked out similar misgivings, before warning officials over gaps in oversight that could lead to the potential misappropriation of federally purchased equipment.

Interim city Finance Director Darren Adair — who made the move to City Hall from Henderson-based cloud-computing giant Switch Communications three months ago — said he couldn’t speak to the specifics surrounding past findings, except to note that none were “out of the ordinary” and all appear to have been addressed.

He didn’t quibble with any of the points listed in Andrus’ 2013 report.

Adair agreed that the revenue-starved city, which was kept under the watchful eye of state regulators even before it flirted with bankruptcy last summer, can ill afford to ignore its bookkeepers.

“What was happening is, because we were under deadline, we were doing some of the (preliminary audit) work while auditors were already in the field,” Adair said. “They noticed this and pointed out to the council that if you keep running this thin, you’re bound to have some mistakes.

“I would agree with that, but you’ve got to work with what you have. We’ve added some electronic tools, and our hope is in time, we’ll return to a normal staffing level.”

This year’s report on the state of the city’s balance sheet underscores a shortcoming that won’t surprise many staffers who have survived years of job freezes and staff cuts at City Hall.

“I think there are two people left in the finance department from when the city was still growing,” said city spokeswoman Juliet Casey. “We went from a high of 49 (staffers) to 19.5 full-time equivalents today.

“It might be this is just the first time that has become evident in the pace of the work. … As we’ve consolidated, you end up having less specialization and fewer people wearing a lot more hats. You end up picking and choosing your priorities. State-mandated (financial) reporting is one of those, so that will always get done.”

Contact Centennial and North Las Vegas View reporter James DeHaven at jdehaven@viewnews.com or 702-477-3839.

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