Report: Arlington Lacks Robust Internal Auditing
A local civic activist is calling for Arlington to improve its internal financial auditing, lest more spending snafus fall through the cracks.
Suzanne Smith Sundberg, a member of the Arlington County Civic Federation Revenues and Expenditures Committee, has written an eight page report detailing what she characterizes as a lack of audit oversight over the county’s finances.
The county eliminated two internal auditing positions during budget cuts in 2010, Sundberg writes, a move that raised red flags with her committee at the time. Recent news items have supported their concern and point to need to create a permanent internal auditing office, she says.
“Recent events in Arlington County — mounting discontent over the ongoing taxpayer support devoted to keeping the Artisphere afloat, taxpayers’ demonstrated opposition to the Columbia Pike streetcar at the recent town hall, and the public outcry over the eye‐popping $1 million price tag for a single bus Super Stop — provide clear evidence that citizens are losing confidence in their local government and its ability to utilize resources in an efficient, effective, and practical manner,” Sundberg writes.
The county employs an external auditing firm, CliftonLarsonAllen. Sundberg, however, pointed to the case of an Arlington County employee convicted of embezzling $12,000 from the county fair as evidence that external auditing is not comprehensive enough to catch many financial irregularities.
County Manager Barbara Donnellan has included $250,000 in one-time funds for “an internal audit function in the Department of Management and Finance” in her proposed FY 2014 budget – still subject to County Board approval – but Sundberg says that doesn’t go far enough.
“Although it’s a welcome step in the right direction, the County Manager’s proposal in her FY 2014 budget is vague and appears insufficient to support the establishment of a robust, permanent internal audit function in Arlington County,” she writes. “No effective internal audit function can ever be established if it is treated as an afterthought, subject to elimination or significant reduction when money is tight. In fact, the most advantageous time to have a strong, independent audit function is during economic downturns when difficult choices must be made and every dollar counts.”
Sundberg suggests that Arlington look to Fairfax County or Montgomery County for examples of effective internal auditing mechanisms.
Fairfax County has two separate internal auditing offices. Montgomery County created an Office of the Inspector General in 1997. Sundberg cites data suggesting that both counties save millions of dollars annually thanks to their internal controls. Arlington, she says, should do the same.
“If Arlington County cannot or will not provide sufficient resources, authority, and independence to sustain a robust and permanent internal audit function, then the establishment of an office of inspector general or special independent auditor — or whatever statutory option may be available — is all the more necessary,” she writes.
Sundberg’s report represents her own analysis and opinion. It has not been endorsed by the Civic Federation.
Latest Artisphere Financial Results a Mixed Bag
(Updated at 10:20 a.m.) The good news for Artisphere, the county’s struggling cultural center in Rosslyn, is that it just had a certified hit in the form of its month-long Frida Kahlo photo exhibit. The bad news is that it’s still falling short of meeting a number of financial goals laid out in a new business plan last year.
The Frida Kahlo exhibit, held from Feb. 23 to March 25, drew 13,119 visitors to Artisphere, according to a recently-released quarterly report. That’s well over three times the audience of Artisphere’s next most popular exhibit to date, a collection of Mongolian clothing, artifacts and art that drew 3,831 visitors over the course of a month and a half in the spring of 2011.
Though the Kahlo exhibit helped bring in visitors, Artisphere failed to capitalize in terms of catering and concession revenue. Artisphere has yet to find a “resident caterer” to pick up the slack left by the closing of the venue’s in-house bar/restaurant last year. As a result catering and concession income for the first three quarters of the financial year was only $24,170, compared to the prorated business plan goal of $63,188.
Artisphere is also falling short of meeting its goal for facility rental income — a key component of the new business plan. Rental income has brought in $214,752 through the third quarter, compared to the goal of $273,600. In a letter to County Manager Barbara Donnellan, the Arlington Economic Development (AED) officials now in charge of overseeing Artisphere predict that rental income will pick up in the fourth quarter and put Artisphere “only slightly under its projections” for the year.
Another disappointment is income from education programs — $17,540 compared to a Q3 goal of $46,800 — but Artisphere managers expect to make up some ground through revenue from summer camps.
Admission and ticket income, meanwhile, is only just short of its goal. Artisphere has collected $147,156 in visitor income compared to the Q3 goal of $149,987. When it first launched in 2010, however, Artisphere was expected to bring in $789,912 per year in admission and ticket income.
Artisphere has “seen many recent successes in its programming, bringing in very popular performers and events that have attracted significantly higher levels of ticket sales,” according to AED officials. That momentum may be difficult to maintain, though, following the sudden resignation of Artisphere’s Programming Director last month.
Financial Education Classes Aimed at Women
Women looking to learn more about managing their finances are in luck. A five week series of classes on the topic will be held at the Central Library (1015 N. Quincy St.) starting next Wednesday.
The course aims to address the unique needs women face with money management. Some of the topics covered include budgeting, insurance basics and investing.
“The premise of the program is that women have unique financial needs,” said Virginia Cooperative Extension Financial Counselor Jennifer Abel. “Women are more likely to leave the workforce to care for young children and the elderly. On average, they have lower life earnings and yet they live longer than men.”
Abel will teach the first session and bring in other certified financial planners for the following weeks.
The classes start on January 25 and run every Wednesday until February 22, from 6:30-8:30 p.m. There is an optional $25 fee for attendees who would like to purchase class materials. To register, email jabel@vt.edu or call 703-228-6417.
