Government auditing varies in Richmond area

While the average taxpayer may recoil when he hears the word "audit," he might embrace it when applied to local governments and how they spend tax dollars.

For example, a recent audit in Goochland County turned up almost $200,000 in undeposited utilities checks.

The county has had to begin a forensic audit of the utilities department that could cost up to $50,000, and another top-down audit of the county has been approved for later this year, at a cost of up to $15,000.

While many of central Virginia's smaller localities don't have their own auditors, some of the region's larger localities spend money to watch money daily.

Richmond Auditor Umesh Dalal's office has a staff of 14 and an annual budget of about $1.6 million. Last year, the office identified more than $21 million in savings for the city.

Like Richmond, Henrico County has a governmental auditing office, which operates at a cost of about $358,000 a year with a staff of four. The department reports to the county manager. Like Richmond, the county also has a separate office for auditing the school system.

Auditing offices in Chesterfield and Hanover counties conduct financial and performance reviews of all county and school departments, in addition to jails, on a continual basis, reporting to administrative and elected leaders.

Chesterfield has eight full-time positions in the auditing department, with a budget of $870,000 annually, some of which is devoted to external audit support. Hanover has a staff of three and a budget of $265,772. Chesterfield auditor Lou Lassiter estimates that his office identifies roughly $2 million a year in savings.

Henrico's internal audit director, Gary Martin, wouldn't venture a guess on annual savings, except to say they are "priceless."

"We have no estimate, since doing so involves many assumptions about one-time or annual savings and projections that can sometimes be self-serving," he said. "Valuing controls and deterrence is very difficult."

Hanover doesn't track its cost savings.

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Smaller jurisdictions such as Goochland, King William and New Kent counties -- which don't have internal audit departments -- rely on their finance departments to monitor budget and expenditure activity in addition to the annual audit required by the state.

"We take seriously the task of handling the finances of the county and the efficiency of operations," said Mary F. Altemus, New Kent's director of financial services.

But with other responsibilities, things can slip through the cracks.

Ned S. Creasey, a Goochland supervisor who took office last year, brought the utility-checks issue to the attention of the administration after hearing rumors of the department's problems.

"I knew something was going on, but I didn't know what," he said.

The probe confirmed his fears and discovered many of the checks in various files and folders. The remainder turned up later, some in a storage-room safe.

As a result of the recent findings in Goochland, two employees were fired, one of them the utilities department director. The county administrator also resigned months earlier than scheduled as more problems unraveled.

Creasey said he finds it worrisome that the issue wasn't caught by the county's annual financial review, despite the fact that e-mails documented the problem for years.

"We've got to change our way of doing things, that's for sure," he said.

. . .

Some larger localities are looking for other ways to watch their dollars, too.

Chesterfield's Dale District Supervisor James M. "Jim" Holland, a certified public accountant, last year helped launch an efficiency committee to help examine spending and identify ways for the county to save money.

"I saw that there was a need for us to really look at our operations, to just do the taxpayers' business efficiently," he said. "I thought we could be doing things better."

Holland said the team already had identified $4 million in potential savings, largely by soliciting feedback from county employees and residents. Areas of focus include technology and vehicle use, he said.

In Richmond, a new spirit of cooperation between the city's top official and its auditor could mean significant savings.

Then-Mayor L. Douglas Wilder leveled criticism at Dalal after a series of critical audits, accusing Dalal of pandering to the City Council, which appoints the auditor.

But Wilder's successor, Dwight C. Jones, has vowed that his administration will be more open to the auditor's office, and he said he is following up on 134 recommendations that weren't addressed under the previous administration.

Jones said he's particularly interested in recommendations to improve the city's fleet-management and procurement operations.

"The old barriers are being eliminated," Jones said shortly after taking office in January, pledging that Dalal's office now has "full and direct access to all city departments"

Contact Wesley P. Hester at (804) 649-6976 or .