Contributors: Jack McKee, Manager, Government & Public Sector
With staffing challenges and exceedingly more complex Government Accounting Standards Board (GASB) requirements, many government and public sector organizations are finding it difficult to focus on their core mission and deliver results for constituents. The solution for many entities has been co-sourcing accounting services to external companies or firms to handle complex record-keeping, reporting and analysis. Understanding the benefits and solutions an advisory team can provide is crucial in maximizing organizational effectiveness and strategic advantages available in the public sector marketplace.
New Insight
Due to their experience working with a diverse client base, consultants can help governments better understand obstacles and opportunities that may exist within their organization. The valuable knowledge and skills they possess can provide a fresh perspective on challenges and drive new strategies for overcoming them:
- Access to data analytic software can unlock new insight into existing or historic information.
- Technical accounting experts can expedite financial reporting to allow for more targeted budgeting.
- Federal grant experts can mitigate the risk of noncompliance and allow access to funding with complex requirements.
- Certified fraud examiners can apply targeted and proven testing techniques to reduce financial losses, protect assets and preserve the integrity of the organization.
When implemented thoughtfully and strategically, co-sourcing can be a valuable tool for governments to drive their future success.
Expertise
Government accounting can present several challenges due to complex regulations and technical requirements ensuring accountability to the public. Local public finance officers are often tasked with staying up-to-date with ever-changing accounting standards, while still meeting the growing operational demands of managing an accounting department.
Even if a finance officer can stay current on the latest technical developments, maintaining a skilled and staffed department can be another matter. Due to the structural differences between governmental and private organizations, there tends to be a lack of managerial roles in public finance. The smaller share of management opportunities may lead experienced and skilled employees to seek opportunities outside of the sector. Having access to a pool of skilled professionals through co-sourcing can strengthen an organization’s framework in a way that is nearly impossible through hiring, training and retaining staff.
Flexibility
Advisors allow government and public sector organizations to have greater flexibility in meeting the ebbs and flows that occur during a fiscal year. Depending on the time of year, workloads can be scaled up or down, and advisors can be used on a project-by-project basis. This can be especially useful during an audit or when implementing a new standard with specific short-term needs. This agility allows governments to meet their needs without worrying about hiring, training and managing additional staff during these peak seasons.
Similarly, scaling back on accounting resources during leaner periods can reduce unnecessary costs. This allows government and public sector organizations to devote more time and resources to their core functions.
Cost Savings
The trend of rising wages is expected to continue due to a shortage of skilled labor. The Government Finance Officers Association (GFOA) released a new report stating the private sector has added back jobs lost during the COVID-19 pandemic, but there are 30,000 fewer state and local public finance workers than in 2019. This problem will be exacerbated due to nearly a third of state and local public finance workers reaching retirement age in the next ten years. The current workforce includes around 50,000 workers who are at retirement age.
Hiring and training full-time employees can be expensive, time consuming and difficult to budget. It is a driver in other associated costs such as office space and equipment. According to a report from the Society for Human Resource Management, the average cost to hire an employee is $4,000; however, these upfront costs for recruitment and hiring are just the beginning. Data provided by Training Magazine estimates the average yearly training cost per employee is $1,207, and employers can expect to dedicate an average of 33 hours of training time for each new employee. Advisors, on the other hand, can be utilized for tailored solutions while only charging for the work that is needed.
How Cherry Bekaert Can Help?
While co-sourcing accounting can offer numerous benefits, it is essential for organizations to consider certain factors before partnering with an external provider. These include evaluating the provider’s track record and reputation, clearly defining the scope of services, establishing communication channels and setting performance metrics.
Our team is comprised not only of GASB experts with the skills and knowledge expected from a national accounting firm, but also includes advisory professionals with deep business consulting experience. Many have worked in government with elected office holders and career civil servants, which has equipped them with first-hand knowledge of government business processes, technology, and rules and regulations. Unlike many other professional services firms with significant governmental accounting expertise, Cherry Bekaert has a dedicated team of professionals who only provide governmental accounting advisory services. This provides governments with the assurance that their needs will not be secondary to competing priorities.
Our advisors can help governments stay focused on their core competencies by handling tasks that require specialized knowledge and skills. Unlike typical loan-staffing arrangements that require constant direction, we execute with minimal disruptions to your team due to Cherry Bekaert’s experienced leadership.
Services provided as part of this offering include the following:
- New GASB Standards Implementation
- Financial Statement Closing Assistance
- Financial Statement Audit Preparation
- Single Audit Preparation
- Accounting Remediation & Support
- Financial Statement Preparation
- Training & Continuing Professional Education
- Financial & Single Audit Finding Remediation
- Enterprise Resource Planning (ERP) Implementation Remediation
- Chart of Accounts Development
If you have questions or want to learn more about our GASB-as-a-Service offerings, consult your Cherry Bekaert advisor or our Government & Public Sector Accounting Advisory practice professionals.
