2017 government benchmarking survey · gain insight into the current areas of concern shared by...
TRANSCRIPT
2017 Government Benchmarking Survey
Scott AndersonDirector
John J. GilbertoPartner, Government Services Industry Leader
The Results are In!
Cherry Bekaert is pleased to present the results of our 6th Annual State and Local Government Benchmarking Survey. Based on the feedback from over 150 survey
participants, we are able to share these valuable results allowing government entities to compare their
own performance, accomplishments and struggles with similar entities across the Southeast. We hope
this report will help you better understand how your peers in the region are responding or planning to
respond to a wide range of current issues.
2
Workforce and Benefits
Use of Technology
Freedom of Information Act
Budget
Debt Structure
Grant Reporting & Administration
Financial Reporting
Risk Assessment & the Audit Process
Overview
3
Almost 50% of staff turnover experienced in the past year is due to retirement
80% of respondents were impacted by the new Pension Standards
Over 80% of respondents do not have level-3 investments under the new Fair Value Measurement
¾ of respondents believe they have adequate security controls against internal and external threats
90% of new financing is intended for capital expenditures
Increasing interest rates will have no impact on over 80% of respondents’ decisions to issue debt
Survey Topics Highlights
4
Learning Objectives
Understand current management trends for local government entities
Gain insight into the current areas of concern shared by government finance professionals
Gain an understanding of what finance professionals believe the future holds for government financial management
Have data for internal benchmarking and budgeting
Participant Data
25%
53%
5%17%
County
Municipality
School
Authority/Commission/Other
Participant Data
6
Type of Entity
36%
25%
14%
25%
CFO/Director of Finance
Controller/Accting Mgr.
Accounting Staff
Elected Official
By Title
42%
17%12%
2%
27%Florida
Georgia
North Carolina
South Carolina
Virginia
State
40%
27%
23%
10%0 - 50 million
50.1 - 250 million
250.1 million – 1 billion
> 1 billion
Participant Data (continued)
7
Size of Entity (by revenue)
51%
27%
13%
9%0 – 500 employees
501 – 2,500 employees
2,501 – 5,000 employees
>5,000 employees
Size of Entity (by number of employees)
Workforce and Benefits
Workforce and Benefits
9
In the last budget cycle, has your staffing level for financial and accounting positions:
18%
7%
75%
9%
17%
74%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Increased Decreased Stayed the Same
2017 2013
Workforce and Benefits (continued)
10
In the past year, have salaries throughout the entity: In the next budget cycle, you anticipate salaries will:
48%
4%
48%
87%
1%12%
Increased Decreased Stayed the Same0%
10%20%30%40%50%60%70%80%90%
100%
2013 2017
Updated left chart, right chart question wasn’t asked in 2013
77%
2%
21%
Increased Decreased Stayed the Same
13%
44%
21%
44%
26%
23%
16%
52%
1%
Other
Retirement
Unhappy with management
Career advancement upon changing jobs
Perceived inability to advance within the locality/entity
Low morale within government
Competitiveness of benefits
Competitiveness of salaries
Layoffs due to budget constraints
0% 10% 20% 30% 40% 50% 60%
11
Workforce and Benefits (continued)
If you have experienced staff turnover in the last year, what do you believe were the attributing factors to the turnover? Check all that apply.
12
Workforce and Benefits (continued)
Over the last year , the benefits package you offer to new employees has:
11% 13%
76%
9%14%
77%
5%
23%
72%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Increased Decreased Stayed the Same
2017 2016 2015
13%
22%
14%
36%
6%
8%
65%
19%
6%
Other
We have not implemented any new measures
Switched to self-insured
Increased employee premium
Reduced spouse and dependent coverage
Account-based healthcare plans
Wellness programs or incentives
In-house medical facilities
In-house pharmacy operations
0% 10% 20% 30% 40% 50% 60% 70%
13
Workforce and Benefits (continued)
Given rising healthcare costs, has your entity implemented any of the following to help reduce healthcare costs: Check all that apply.
90%
52%
88%
47%
40%
Webinars
Self-study
State society conferences/training events
National society conferences/training events
In-house training conducted by service providers
0% 20% 40% 60% 80% 100%
Workforce and Benefits (continued)
14
How does your entity maintain annual professional continuing education and training for its employees? Check all that apply.
Use of Technology
Use of Technology
0
1-4
5-10
More than 10
0% 20% 40% 60% 80% 100% 120%
0-500 employees 501-2,500 employees 2,501-5,000 employeees >5,000 employees
16
How many IT-related full-time employees does your entity have? (by number of employees)
Use of Technology (continued)
Very prepared
Somewhat prepared
Limitedly prepared
Unprepared
0% 20% 40% 60% 80% 100%
County Municipality School Authority/Commission/Other
17
How would you rate your organization's preparedness for a cyber attack? (by entity type)
9%
1%
5%
85%
Yes, deliberately perpetrated by an external party
Yes, deliberately perpetrated by an internal party
Yes, unintentional information release
I don't know
Use of Technology (continued)
18
In the past year, has your entity experienced a data breach?
Use of Technology (continued)
13%
31%
25%
31%
Very well – everyone receives required formal training at least annually.
Some general training is provided as part of the onboardingprocess only.
Some general training is provided sporadically or if a significantevent occurs.
We don’t formally train our employees on HIPPA.
0% 10% 20% 30% 40%
19
How well are your employees trained on HIPPA requirements?
Use of Technology (continued)
20
How well are your employees trained on the importance of Internet security?
23%
30%
26%
21%
0%
5%
10%
15%
20%
25%
30%
35%
Very well - formal trainingat least annually
Some general trainingduring onboarding
Some general trainingsporadically or following a
significant event
We don't formally trainemployees on internet
security
Use of Technology (continued)
21
When was your last IT System overhaul (not including annual system updates)?
8%
61%
18%13%
0%
10%
20%
30%
40%
50%
60%
70%
In the past year In the past 1 to 5 years In the past 6 to 10 years So long ago I cannotremember
Use of Technology (continued)
22
When do you plan your next IT System overhaul (not including annual system updates)?
11%
19%
31%
8%
31%
10%
14%
33%
5%
38%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Recently upgraded In the upcoming year In the next 2-5 years In the next 6-10 years We do not have an ITSystem overhaul
planned at this time2013 2017
85%
15%
Yes No
20%
74%
6%
Yes No Does not apply
Use of Technology (continued)
23
Do you anticipate replacing your enterprise business systems or other business systems (tax revenues, human resources management, etc.) in the next 18-24 months?
Do you anticipate a need to increase IT spending to support the new planned system environment?
79%
21%
Yes No
Do you believe the increased use of technology will be necessary to keep costs under control?
These questions were not asked in 2013.
82%
15%
3%
Yes No Does not apply
61%
39%
Yes No
Do you anticipate changes in your locality’s need for risk management and oversight strategies for use with cloud-based services, such as business interruption, information security, privacy, availability and processing integrity?
Use of Technology (continued)
24
64%
36%
Yes No
Are you considering expanded use of “cloud-based” services (i.e., Software as a Service, Infrastructure as a Service) to reduce dependency on internal resources and potentially reduce costs to support your current business systems?
Do you believe your current business systems have adequate security access controls to support your anti-fraud program of controls from both internal and external threats?
65%
35%
Yes No
Is IT risk assessment part of your entity's strategic planning process?
20%
49%
12%
3%
16%
Whenever there is a major change to our IT Environment
Annually
Once every 3 years
Once every 5 years
We do not complete IT Risk Assessments
Use of Technology (continued)
25
How often does your entity undergo an IT risk assessment?
36%
15%
49%
Internally
Externally
Both
Are these IT risk assessments performed:
Freedom of Information Act
Freedom of Information Act
26%
52%
22%
40%
20%
40%
31% 31%
38%
45%
12%
43%
I don't know No Yes0%
10%
20%
30%
40%
50%
60%
Authority/Commission/Other School Municipality County
27
Has your entity seen an increase in Freedom of Information Act (FOIA) requests in the past 5 years? (by entity type)
33%
67%
Yes
No
Freedom of Information Act (continued)
28
Does your entity need to be more transparent?
Freedom of Information Act (continued)
Other
Include searchablecheckbook detail online
Include monthly financialreports online
Hire staff dedicatedsolely to handling FOIA
requests
0% 20% 40% 60% 80% 100% 120%
County Municipality School Authority/Commission/Other
29
What actions has your entity taken or considered taking to increase transparency? (by entity type)
Budget
73%
9%
18%
Increase Decrease Stay the Same
Budget
31
Over the next year, do you anticipate your entity’s budget will:
This question was not asked in 2013.
Budget (continued)
39%
25%
16%
6%
14%
9%
37%
21%
12%
21%
14%
29%
21%18% 18%
9% 9%
27%
18%
37%
<1% 1-1.9% 2-2.9% 3-3.9% 4% or more0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0-50 million 50.1-250 million 250.1 million - 1 billion >1 billion
32
What percent of your entity’s budget is spent on IT? (by revenue)
Budget (continued)
43%35%
8%14%
3%
33%
15%
49%
4% 7%11%
78%
0% 0%
9%
91%
<$100,000 $100,000-$499,999 $500,000-$999,999 $1,000,000 or more0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0-50 million 50.1-250 million 250.1 million - 1 billion >1 billion
33
What is your annual IT budget? (by revenue)
34
Budget (continued)
6%
27%
59%
8%11%
23%
61%
5%
0%
10%
20%
30%
40%
50%
60%
70%
Raise taxes to balance thebudget
Reduce costs to be moreefficient with a slight increase
in taxes
Maintain tax rate and reducecost of services
Reduce taxes at the expenseof programs and services
2017 2013
What is the Board or Commission position on property taxes?
Removed all N/A responses and recalculated percentages based on other responses. Removed N/A from chart. GSG should make a note for 2018 survey that the first question should be “Does your entity have property taxes? Y/N” Then, I can route the respondent around this question if it doesn’t apply.
35
Budget (continued)
Yes, currently
No, not currently, but plan to
No, and don't plan to
0% 10% 20% 30% 40% 50% 60% 70% 80%
0 - 50 million 50.1 - 250 million 250.1 million - 1 billion > 1 billion
Is your entity currently producing multi-year revenue forecasts and/or budgets? (by revenue)
36
Budget (continued)
None
Replacement of aging infrastructure
Transportation
Security and terrorism preparedness
Security and prevention of cyber attacks
Technology
Services for the increasing aging population
Services for the increasing population
0% 20% 40% 60% 80%
0 - 50 million 50.1 - 250 million 250.1 million - 1 billion > 1 billion
Do you have concerns about budgeted funding for the following? Check all that apply. (by revenue)
Debt Structure
Debt Structure
38
When do you plan to incur debt?
46%
22%
32%32%
27%
41%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Within the next year In 1-3 years No time in the foreseeable future
2017 2013
90%
1%8%
0% 1%
73%
6%
15%
2% 4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Capital expenditures Operations Refunding Fund pension/OPEBliabilities
Other
2017 2013
Debt Structure
39
What do you intend to use your next financing for?
Debt Structure (continued)
40
In the next two years, do you project interest rates will?
14%
64%
13%9%
0%
36%40%
22%
1%0%
10%
20%
30%
40%
50%
60%
70%
Increase ≤1% Increase >1% Increase >2% Stay the same Decrease
2017 2016
41
Debt Structure (continued)
21%
5%
74%
14%7%
79%
7%
19%
74%
20%
10%
70%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Yes, we will likely forego issuing newdebt.
Yes, we will likely consider interestrate swaps.
No.
0-50 million 50.1-250 million 250-1 million - 1 billion > 1 billion
Will increasing interest rates have an impact on your decision to issue debt? (entity size)
Grant Reporting & Administration
43
Grant Reporting & Administration (continued)
43%
14%
25%
18%
45%
15%
33%
7%
40%
0%
60%
0%
52%
5%
29%
14%
0%
10%
20%
30%
40%
50%
60%
70%
No, and we had NOcompliance findings in the
last audit.
No, and we had compliancefindings in the last audit.
Yes, and we had NOcompliance findings in the
last audit.
Yes, and we had compliancefindings in the last audit.
County Municipality School Authority/Commission/Other
Does your entity have a separate grant management function? (by entity type)
Grant Reporting & Administration (continued)
44
Over the next two years at your entity, will grant funding/spending levels:
35%
14%
51%
36%
7%
57%
31%
12%
57%
0%
10%
20%
30%
40%
50%
60%
Increase Decrease Stay the same
2017 2016 2015
Financial Reporting
11%
76%
7%6%
Yes
No, our policies were already compliant
No, we are not yet compliant.
We are not subject to procurement standards.
19%
8%
6%
3%44%
20%
Yes, we contribute to a single-employer trust.Yes, we contribute to an agent multiple-employer trust.Yes, we contribute to a cost-sharing multiple-employer trust.No, but we plan to in the future.No.I'm not sure.
Does your entity currently fund its OPEB liability by contributions to a trust?
Financial Reporting
46
Did you make significant changes to your procurement policies to become compliant with the Uniform Guidance?
47
Financial Reporting (continued)
Healthcare Death Benefits Life Insurance Disability Long-term Care0%
20%
40%
60%
80%
100%
120%
0-500 employees 501-2,500 employees 2,501-5,000 employees >5,000 employees
What type of OPEB benefits does your entity offer? (by number of employees).
48
Financial Reporting (continued)
Healthcare Death Benefits Life Insurance Disability Long-term Care0%
20%
40%
60%
80%
100%
120%
County Municipality School Authority/Commission/Other
What type of OPEB benefits does your entity offer? (by type).
Financial Reporting (continued)
49
5%3%
85%
7%
Yes, benefits are being reduced.
Yes, benefits are being increased.
No changes to benefits.
We do not have the authority to change our OPEBbenefits.
Does your entity plan to make changes to its OPEB benefits as a result of the new standards?
60%
19%
3%
14%
4%
External auditors
Actuaries
The state
No outside asistanceanticipated
Other
0% 20% 40% 60% 80%
From whom do you anticipate receiving assistance in implementing the OPEB standards required by GASB 74 and GASB 75?
Financial Reporting (continued)
50
3%
55%
10%
8%
4%
12%
42%
Other
We do not offer tax abatements
Green initatives
Infrastructure
Technology investments
Residental improvements
Economic development
0% 10% 20% 30% 40% 50% 60%
Given the new Tax Abatement Standard required by GASB 77, which of the following tax abatement programs do you offer? Check all that apply.
47%
50%
3%
Yes No Other
Financial Reporting (continued)
51
Do you believe recent accounting standards have improved financial reporting for the primary users of your financial statements?
5%
47%
57%
34%
6%
10%
63%
81%
78%
Other
Federal grantors or pass-…
State government
Taxpayers/Constituents/Etc.
Vendors
Customers
Bond counsel or other…
Management
Governing body
0% 20% 40% 60% 80% 100%
Who would you deem the primary users of your financial statements? Check all that apply.
Financial Reporting (continued)
52
63%
37% Yes
No
Given the current uncertainty of state and federal funding, do you think information regarding intergovernmental dependency should be included in the financial report?
Financial Reporting (continued)
53
66% 72%59%
73%
95%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Use Purpose Length Type Source
Use Purpose Length Type Source
What type of information should be included in the financial report regarding intergovernmental dependency? Check all that apply.
Financial Reporting (continued)
34%
60%
34%
48%
26%
2%
Conceptual Framework: Recognition
Financial Reporting Model
Leases
Revenue and Expense Recognition
I don't follow GASBs current projects.
Other
0% 10% 20% 30% 40% 50% 60% 70%
54
Which current GASB project(s) are you following? Check all that apply.
55
Financial Reporting (continued)
80%
7%13%
87%
3%10%
60%
0%
40%
62%
14%
24%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Yes No No, we do not prepare a CAFR
County Municipality School Authority/Commission/Other
Does your entity submit its financial statements to the GFOA for the certificate program? (by entity type)
Risk Assessment & the Audit Process
25%
18%
57%
More centralized
More decentralized
Stay the same
31%
12%
57%
Yes
No
We do not have a fraud hotline
Risk Assessment & the Audit Process
57
Do you see your entity becoming more centralized or more decentralized in the next few years?
Is your fraud hotline an effective tool in detecting fraud and abuse?
Risk Assessment & the Audit Process (continued)
58
5%
16%
16%63%
External auditors Internal auditors Fraud hotline Another employee
If a fraudulent event occurred at your entity in the last year, how was it caught?
Risk Assessment & the Audit Process (continued)
59
Yes, it reports to the governing body.
Yes, it reports to management.
No
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
0 - 50 million 50.1 - 250 million 250.1 million - 1 billion > 1 billion
Does your entity have an internal audit function? (by revenue)
Thank You!
John Gilberto, CPAPartner, Government Industry Leader
Scott Anderson, CPADirector