Wednesday, September 2, 2015

Butkovitz: Audit raises questions about city cash management

The city government paid over $1 million in bank fees over a one-year period ending last summer but never analyzed whether it could've been charged less, according to an audit released by City Controller Alan Butkovitz on Thursday.

Butkovitz: Audit raises questions about city cash management

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City Controller Alan Butkovitz.
City Controller Alan Butkovitz.

The city government paid over $1 million in bank fees over a one-year period ending last summer but never analyzed whether it could’ve been charged less, according to an audit released by City Controller Alan Butkovitz on Thursday.

“The Treasurer’s Office needs to ensure the City isn’t being overcharged and that it’s receiving the best rates,” Butkovitz said in a press release.

The audit also found that there wasn’t enough oversight over how the city handles its cash flow on a daily basis. And in some cases, the way the city records its cash balances may obfuscate whether additional savings can be realized, according to Butkovitz’ audit.

City Finance Director Rob Dubow did not immediately respond to a request for comment, but in a response attached to the audit, he disputed many of its findings.

“The Treasurer’s Office does review charges and works with the authorized depositories to make fee adjustments as necessary,” he wrote of the claim that the city doesn’t adequately ensure it pays the lowest fees possible to banks.

Additionally, the city is implementing a new "state-of-the-art cashiering/payment processing system that will increase efficiencies," Dubow wrote,

Dubow did agree with some of the audit’s recommendations, including one to expand the types of accounts that contractually lock in what their bank fees will be. Pension and payroll accounts already do that, he wrote, and plans to get contracts for “all commercial banking services” are already underway.

Also, Butkovitz said employees who make daily cash decisions do so with little guidance except for quarterly strategy meetings. Dubow, however, said those employees confer regularly with others in Finance but agreed with a recommendation that written procedures be established to guide those decisions.

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