Finance director will save county dollars, say other executives

By Thomas Wilson
STAR STAFF
twilson@starhq.com

   Money matters.
   Carter County officials are moving to hire a financial director and implement a financial management plan to manage the county departments' books. The question is, will a new department save the county money?
   According to two county executives in locales where a financial management plan is in place, the answer is yes.
   "We looked at it from this standpoint -- duplication of services like that was totally inefficient and wasteful of the taxpayers' money," said Ronald L. Banks, county executive of McMinn County on the county decision to adopt a financial management plan in 1983.
   "We've saved money just on refinancing. Our financial director knows that background and he gets the best rates available on our money, which we weren't doing before," said J. Allen Watson, county executive of Monroe County. "Just on purchasing alone, it has saved this county hundreds of thousands of dollars."
   The Carter County Financial Management Board has visited both counties in southeast Tennessee where the financial director and financial management plan have been operating for some time.
   The board has been developing job standards for the finance director since it's first meeting in June.
   Both Banks and Watson said the finance director helped the county realize savings on bonds, refinancing projects and purchasing.
   "We can get more of a volume savings buying for the whole county," said Banks, who stated that his county was essentially debt free. "The whole process is one of the things of us being debt free."
   A department head develops the specification for bid, which is then turned into the finance director's office, said Banks.
   "We just don't do the mechanics of hollering at the vendors and keeping the actual books," he said.
   Banks said McMinn had organized the financial director under the county financial management plan passed by the General Assembly in 1981.
   Prior to the plan, the elected or appointed head of county department, "ran their own separate shop," said Banks, who added that his office and the county's departments were still responsible for their expenditures. "We had already consolidated the road and bridge departments, and we moved the school administration people who had financial duties into the financial management department."
   That decision turned out to be a move that initially created some resistance among some county officials.
   "People are always resistant to change," chuckled Banks. "We had a little problem bringing in the schools because they wanted to keep on with their own finances.
   "The school board at that time had reservations about it, but if we tried to go back the other way now, we'd have a riot on our hands."
   Monroe County adopted its financial management plan in the mid-1990s, Watson said.
   "It takes a lot of strain off this office because we are involved with so many different things, like tourism, industrial development, the solid waste division...," said Watson, who is running for his fourth term as executive in Monroe County.
   Like Banks, Watson said some county officials had to be convinced of the benefits in relinquishing their purchasing and accounting duties.
   "The highway superintendent wasn't sold on the idea initially, because of his purchasing power in the past," said Watson. "Now you couldn't pry him away from it."
   A deputy finance director for each county was also created in the financial management office. In both cases, the deputy director had served as finance director for the county school system.
   Banks said each department and every county commissioner received a monthly status report of the county's finances.
   The county financial act became more important a few years ago when fiscal oversight became a major concern of county commissions across Tennessee.
   "Several years ago, we had situations across the state where the county commissions had found out that the schools had overspent their budgets," said Banks. "When you got this, it give the county commission an opportunity to know just exactly how the financial transactions for the whole county are coming along."
   "If one area looks like it is over spending on its budget, they are already aware of what is happening," he added. "It gives me peace of mind to realize that come April, somebody isn't going to come up and say 'whoops, we're out of money.'"
   The finance department had added one new employee in 18 years, Banks said.
   Since the financial department's creation, Banks said the county had funded the construction of a new jail, a new county school, renovations to other county schools, and made other infrastructure improvements.
   "It is just being able to consolidate and know what our resources are," he said. "When you got finances out in the three different areas, it is kind of hard to figure out where you are."
   The financial management law requires a financial director to develop a purchasing, payroll, budgeting, accounting and cash financial management system for the county.
   The law requires a director to have a Bachelor of Science degree from an accredited college or university with at least 18 hours in accounting. 
   Once Carter County hires a financial management director, that system must be introduced to the county by July 1, 2003, and fully implemented by August 1, 2004.
   The financial director also has the authority to hire personnel for the finance department provided, that the positions funded and hired meet the written job requirements as recommended by the director and are approved by the committee. 
   The Division of County Audit under the Tennessee Comptroller of the Treasury's office has cited Carter County's lack of adopting a centralized accounting, budgeting and purchasing system in past audits.
   Watson said the finance director's current salary was $56,000 and the county finance department operated with nine employees on an overall budget of $314,000.
   Banks said the budget of McMinn County's finance department was $327,000 with eight employees. The department managed a county-wide budget including the school system and all departments of around $47 million.
   The Carter County board has set a minimum salary of $30,000 for the finance director. However, that figure may have to go higher if the county wants a top candidate given the scope of the finance director's job.
   "Whoever you hire, that's going to be the key," said Watson. "He has to do the job and get along with the department heads and the county commission."