Campbell should ask state to straighten out its books

Before Mayor WILLIAM VanSuch launches the search for a new finance director — it seems clear that the current director, Sherman Miles, is in over his head — he should heed the advice of the chairwoman of the state commission overseeing Campbell’s finances and hire the state auditor’s office to clean up government’s books. The $17,000 price tag would certainly pay larger dividends than hiring a full-time budget director now. Miles should be replaced, but there is no need to immediately fill the position. VanSuch can request help from the county auditor with the day-to-day financial operations.

The priority is the reconciliation of the city’s ledgers with the bank statements because this problem is preventing Campbell from shedding the state-mandated fiscal-emergency designation. Emergency was declared seven years ago by the state auditor’s office because the operating budget was bleeding red ink and city officials did not have the ability to turn things around. The fiscal oversight commission has controlled the finances, directed expenditures and guided the mayor and council on how to increase revenue.

With the passage last year of a levy to stabilize the collapsing economy — real progress has been made in that regard — Mayor VanSuch believed the city could emerge from fiscal emergency this month.

On Monday, he and other city officials got a reality check from Sharon Hanrahan, commission chairwoman. She told the mayor there are still too many accounting and bookkeeping deficiencies that have gone uncorrected.

And then she brought the hammer down: The earliest Campbell would be ready to ask for a release from emergency would be January 2013.

The city is so far behind in reconciling monthly bank statements with its records that the administration would be better off finding a solution to this embarrassing problem. Embarrassing because reconciliation is standard operating procedure in government. Finance directors are expected to know how to perform that function — without needing to be trained by state a auditor, as was the case with Miles.

To illustrate the depth of the crisis, Hanrahan pointed out, “We don’t know the cash balance of the city.”

Bringing in a new finance director rather than hiring the state auditor’s office would be an error in judgment on the part of the mayor and council — especially in light of the recommendation from the chairwoman of the fiscal oversight commission.

Important opinion

It is clear she does not believe Campbell has the wherewithal to deal with the situation. Her opinion matters more than anybody else’s because she has the ear of state Auditor Dave Yost. The decision to lift the fiscal-emergency designation is his.

The auditor’s representatives were at the meeting Monday and said it would cost the city $17,000 to get current with the reconciliations. That’s a small price to pay for what will be a major step in the right direction for the city of Campbell.

The fiscal oversight commission isn’t going to wait forever for this mess to be cleaned up. The chairwoman told city officials that they must amend the five-year financial forecast — a requirement for the lifting of emergency — by Feb. 6 to include a time line for when outstanding bookkeeping and accounting deficiencies will be corrected.

The clock is ticking.