Banking & Finance and Government

GR voters can change how city manages its finances

Ballot approval could lead to new policy that creates an audit committee and officer.

October 27, 2012
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Voters in the city of Grand Rapids will have an opportunity Nov. 6 to alter how the city manages its finances. Proposal 1 on the city’s portion of the election-day ballot asks registered voters if they want to change the city comptroller’s position from an elected one to an appointed one.

If they vote yes, a comptroller would be appointed by the city manager, but the choice would have to be approved by the city commission. A no vote would maintain the status quo and continue to let voters decide who gets the position.

The catalyst behind the proposal is the city’s current comptroller, Donijo Robbins De Jonge, who has said she wouldn’t qualify for the post if the selection method is changed because the policy she recently gave commissioners requires a certified public accountant to fill the position and she isn’t one. “I don’t have the credentials for this job. I don’t have a CPA,” she recently told commissioners.

But De Jonge’s effort is about much more than who selects the comptroller. It’s about how the city will manage its finances in the future.

In the draft policy she gave commissioners to review, De Jonge calls for the creation of an independent audit function that would detach auditing from accounting, a service she felt was largely what the comptroller does. In fact, De Jonge said she sees her position as the city’s chief accountant: She pays the bills, signs the checks, records the transactions and makes sure everything is in accordance with accounting standards.

“The modern financial function separates auditing from accounting. Under this modern-day model, the chief audit executive, not the chief accountant, is responsible for audit planning, conducting audits and reporting findings and recommendations,” she wrote in her memo to commissioners. “Today, however, the city’s concept of accounting has not kept pace with the accounting and finance industry.”

Her policy also would establish a six-member Accountability Advisory Committee chaired by the city’s mayor, who would appoint two members to the committee. The city manager would name three. This committee would then appoint an accountability officer, who would serve a three-year term and head the office that would be responsible for all audits and reports.

Also under her policy, candidates for that post would have to meet a set of industry requirements, such as certification as an internal auditor, a government auditing professional, or a public accountant, or any combination of the three.

De Jonge also pointed out the committee would be independent of the city commission because commissioners set policy but don’t manage the city. In addition, her policy merges the comptroller and the chief financial officer into a single position. De Jonge said data shows the return on investment from employing an internal auditor ranges from 200 percent to 400 percent.

De Jonge said the process she is suggesting is widely used in the private sector. “This is kind of a private-sector model,” she said.

“This is not really out there in the public sector, but it’s alive and well in the private sector,” said Commissioner Walt Gutowski, who is also the owner of a small business.

“The role Donijo is suggesting is based on performance,” said City Manager Greg Sundstrom. “This scares me more than a city commission, as a city manager. But I feel it’s the right thing to do.”

De Jonge was appointed to the comptroller’s post in 2010 after Stanley Milanowski left the office. She won election to the position last November. If voters approve the proposal, her policy will come back to the commission after the election.

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