WYOMING LEGISLATIVE SERVICE OFFICE

ISSUE BRIEF

OTHER STATES’ LOCAL GOVERNMENT FISCAL PROCEDURES TRAINING

August 2020 by Karla Smith, Senior Program Evaluator

BACKGROUND Legislative Service Office staff presented an issue brief summarizing fiscal procedures training for Wyoming local government and political subdivision fiscal officers to the Management Audit Committee during its January 2020 meeting.1 The Committee requested further information regarding other states’ statutory requirements for fiscal procedures training for local government and special district clerks and treasurers. This issue brief examines the statutory requirements of Wyoming and nine comparator states regarding local government training in fiscal procedures.

WYOMING Wyoming statutes do not require local government fiscal officers to complete state fiscal procedures training, but do require the State Auditor and the State Treasurer to provide voluntary education programs:

To enhance the background and working knowledge of political subdivision treasurers in governmental accounting, portfolio reporting and compliance, and investments and cash management, the state auditor and the state treasurer shall conduct voluntary education programs for persons elected or appointed for the first time to any office or as an employee of any political subdivision where the duties of that office or positions of employment include taking actions related to investment of public funds and shall also hold annual voluntary continuing education programs for persons continuing to hold those offices and positions of

1 Wyoming LSO Issue Brief: Fiscal Procedures Training, January 2020 P a g e | 1

20IB004 • RESEARCH AND EVALUATION DIVISION • 200 W. 24th Street • Cheyenne, Wyoming 82002 TELEPHONE 307-777-7881 • EMAIL [email protected] • WEBSITE www.wyoleg.gov

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employment. The State Treasurer and State Auditor may contract with other persons with special knowledge in this area to provide these programs. 2

Recently, the State Auditor’s Office, in conjunction with the State Treasurer’s Office, launched a new training program aimed at increasing knowledge of audit standards and compliance.3 The State Auditor’s Office currently offers training for state fiscal staff and most courses are relevant and available to special district and local government fiscal personnel. These topics include: Budget 101, GAAP (Generally Accepted Accounting Principles), and Cost Accounting. The State Auditor’s and the State Treasurer’s Offices are working with entities such as the Wyoming County Treasurers Association, the Wyoming Association of County Officers, Wyoming Association of Municipal Clerks and Treasurers, Wyoming Association of Conservation Districts, and the newly formed Wyoming Association of Special Districts to integrate and expand voluntary training by including topics such as: the Wyoming Public Records Act, basic governmental accounting, reporting and compliance, investments, and cash management. One training conference occurred in February 2020, however, due to the COVID-19 pandemic, the summer and fall conferences were cancelled. 4

In addition to the training requirement for the State Auditor’s Office, Wyoming Statute 9-5-507 requires the Department of Audit, when necessary, “to instruct county and municipal officers in the proper mode of keeping accounts.”5 The Department provides financial training resources such as an Accounting Manual, Census Manual, Special District Handbook, and the Wyoming Municipal Handbook on their website.6

COMPARATOR STATES SUMMARY The following nine states were selected for comparison with Wyoming:

• Arizona • New Mexico • Colorado • North Dakota • Idaho • South Dakota • Montana • Utah • Nebraska

State statutes and approaches to local government fiscal procedures education varied among the nine comparator states. Like Wyoming, some states take a “carrot” approach whereby the state offers fiscal training but does not require local governments to participate. Other states follow a

2 W.S. § 9-4-831(j). 3 Wyoming LSO Issue Brief: Fiscal Procedures Training, January 2020 4 Per official at the State Auditor’s Office. 5 W.S. § 9-1-507 (a)(iv). 6 Management Audit Committee meeting minutes, January 29, 2020. https://wyoleg.gov/InterimCommittee/2020/SMA-20200129MeetingMinutes.pdf

20IB004 • RESEARCH AND EVALUATION DIVISION • 200 W. 24th Street • Cheyenne, Wyoming 82002 Telephone 307-777-7881 • Email [email protected] • Website www.wyoleg.gov PAGE 3 OF 8

“stick” approach which requires local government officials or fiscal officers to complete training. Two states do not have any statutory requirements for local government fiscal training.

Local government official/employee required to complete fiscal training Utah statute requires local district board members to complete fiscal training provided by the Utah State Auditor.7 Similar legislation is currently pending in the Nebraska Legislature. If passed, 2020 LB781 will require city treasurers to complete annual continuing education provided by the Nebraska State Auditor.8

Table 1. States require local government fiscal training.

Legal Training State Fiscal Training Requirement Training Provider authority Recipients

Nebraska 2020 City Treasurers must take Training must be approved City introduced continuing education annually. by State Auditor of Public Treasurers bill LB781 Accounts.

Utah Utah Code Local District Board members State Auditor. Local § 17B-1-312 must complete training within district one year of taking office. board members

Source: LSO statute review.

State government entity required to provide fiscal training Similar to Wyoming, four states (Arizona, Colorado, New Mexico, South Dakota) have enacted statutes which require an agency, division, or section of state government to provide fiscal procedures training or guidance. A fifth state (Montana) has a similar requirement in administrative rule. Although each of these five states require trainings be offered, local governments are not required to participate.

Three states (Colorado, Montana, New Mexico) have a state agency local government department or division which provides the fiscal trainings and resources. Two states have a legislatively appointed state auditor (Arizona and South Dakota) and the legislative audit departments provide training or guidance. The Arizona Office of Auditor General is a fiscal auditing function with approximately 220 employees. The South Dakota Department of Legislative Audit performs fiscal audits and approves independent public accountants who perform government audits. Neither office performs program evaluations.

7 Utah Code § 17B-1-312 8 The State Auditor of Nebraska, Utah, and Wyoming is an elected executive branch official.

20IB004 • RESEARCH AND EVALUATION DIVISION • 200 W. 24th Street • Cheyenne, Wyoming 82002 Telephone 307-777-7881 • Email [email protected] • Website www.wyoleg.gov PAGE 4 OF 8

Table 2. States provide local government fiscal training, but attendance is voluntary.

Legal Training State Fiscal Training Requirement Training Provider authority Recipients

Arizona A.R.S. § Arizona Auditor General must Arizona Auditor Counties, Cities & 41- enforce uniform accounting and General. Towns, Community 1279.21 instruct local officers. Colleges, School Districts, K-12, Charter Schools, Special districts Colorado C .R.S. § Division encourages and Department of Officials and 41- cooperates in training events, Local Affairs, employees of local 1279.21 serves as a clearinghouse for Division of Local governments: providing technical assistance, Government. municipal develops solutions, and makes corporations, quasi referrals to state and federal municipalities, agencies. counties, local improvement and service districts Montana ARM Division provides technical Department of Local Governments 2.1.101(f) assistance and training on Administration, accounting and financial State Fiscal records and works with local Services Division, governments to ensure Local Government compliance. Services Bureau. New NMSA § Division has authority and duty Department of Local public bodies Mexico 6-6-2(k), to make rules and prescribe Finance and (l) how local public bodies prepare Administration, their budgets and financial Local Government reports. The Bureau provides Division and assistance and training. Financial Management Bureau. South SDCL § Department provides Department of Counties, Dakota 4-11-2. accounting manuals and Legislative Audit. municipalities, assistance to implement school districts accounting systems, holds periodic workshops and offers assistance by telephone and on- site. Source: LSO statute review

20IB004 • RESEARCH AND EVALUATION DIVISION • 200 W. 24th Street • Cheyenne, Wyoming 82002 Telephone 307-777-7881 • Email [email protected] • Website www.wyoleg.gov PAGE 5 OF 8

No statutory requirement for fiscal training Idaho and North Dakota do not have requirements for local government fiscal training or the provision of guidance materials. However, both states have professional associations which fulfill this role by offering training to local governments or political subdivisions.

Table 3. States without required local government fiscal training.

State Training Provider Training Recipients

Idaho Association of Idaho Cities provides training and specific City fiscal officers fiscal certifications. Many city fiscal officer job descriptions require certification.

North Dakota Various professional associations provide training and Cities, Counties, the State Auditor may assist. School Boards, etc.

Source: LSO statute review.

COMPARATOR STATE SPECIFICS Arizona statutes direct the Arizona Auditor General to order and enforce a uniform system of accounting for all political subdivisions subject to Arizona constitutional expenditure limitations and to provide detailed instructions on the proper mode of keeping accounts of their offices, completion, and submission of required reports.9 Accordingly, the Auditor General provides a uniform accounting manual for Arizona counties which specifies internal controls for accounting and financial reporting in conformity with statutory requirements and generally accepted accounting principles. 10 Additionally, the Auditor General offers training and resources specific to each political subdivision: charter schools, cities and towns, community colleges, school districts, special districts, and universities. These resources include some or all of the following areas: FAQs, forms, fraud prevention alerts, manuals and memos, reporting guides, and webinars.11

Colorado statutes direct the Division of Local Government within the Colorado Department of Local Affairs to serve as a clearinghouse for providing technical assistance, developing solutions, and making referrals to other state and federal agencies for the benefit of and upon request by local government.12 Local government is defined as all municipal corporations, quasi municipalities, counties, and local improvement and service districts in the state.13 The Division is statutorily required to encourage and cooperate in training institutes, conferences, and programs of local

9 ARS §§ 41-1279.07, 41-1279.21. 10 https://www.azauditor.gov/sites/default/files/UAMAC.pdf 11 https://www.azauditor.gov/ 12 C.R.S. § 24-32-104. 13 Id.

20IB004 • RESEARCH AND EVALUATION DIVISION • 200 W. 24th Street • Cheyenne, Wyoming 82002 Telephone 307-777-7881 • Email [email protected] • Website www.wyoleg.gov PAGE 6 OF 8 government for officials and employees.14 Among the resources the Division makes available are a financial management manual, workshops, publications, individual consultations, and financial analysis. Additionally, Division staff perform research functions for local governments and other interested parties.15 Colorado statutes do not require local government officials to participate in these trainings.

Idaho does not have statutes or administrative rules regarding fiscal procedures training.16 The Association of Idaho Cities, which includes the Idaho City Clerks, Treasurers, and Finance Officers Association, offers “extensive” opportunities for training.17 Available training also includes state certification programs for fiscal officers. Many city fiscal officer job descriptions require the prospective applicant to be certified or able to obtain certification within a certain period of time. 18

Montana statute requires the Montana Department of Administration to prescribe accounting methods for local governments by rule. The statute defines local governments as “counties, cities, districts, or public corporations that have the power to raise revenue or receive, disburse, use, or expend local, state, or federal government revenue for the purpose of serving the general public.”19 Department administrative rules direct the Department’s Fiscal Services Division, Local Government Services Bureau to provide technical, accounting, budgeting, financial reporting, and audit compliance assistance to local governments. 20 The Bureau maintains and publishes the local government Budgetary, Accounting, and Reporting System (BARS) chart of accounts, as well as the county collection and accounting manuals to local governments. Statutes and rules do not require local government officials to participate in training.

Nebraska currently does not have any statutory requirements for local government fiscal officer training. However, a bill to require county, city and village treasurers to complete annual continuing education programs approved by the State Auditor of Public Accounts was introduced, amended in committee, and on general file during the 2020 legislative session. The Nebraska Legislature suspended its 2020 legislative session on March 17th due to the COVID-19 pandemic, so consideration of the bill has been delayed until the Legislature reconvenes. The legislation would require the auditor to maintain records of program attendance and notify each county board, city council, or village board of trustees if its treasurer has not attended. Legislation would then require the auditor to inform the Nebraska Attorney General and the relevant county attorney if

14 Id. 15 Colorado Department of Local Affairs, Division of Local Government Services. 16 LSO review of Idaho Statutes and Administrative Rules. 17 Personal communication with AIC official. 18 Ibid 19 Montana §§ 2-7-501 to 2-7-504. 20 Montana Administrative Rules 2.1.101(f).

20IB004 • RESEARCH AND EVALUATION DIVISION • 200 W. 24th Street • Cheyenne, Wyoming 82002 Telephone 307-777-7881 • Email [email protected] • Website www.wyoleg.gov PAGE 7 OF 8 such treasurer has not completed the required annual continuing education program.21 The legislation does not contemplate training for fiscal officers of other local political subdivisions.

New Mexico statute requires the Local Government Division of the Department of Finance and Administration to promulgate “rules relating to budgets, records, reports, handling disbursements of public funds or any manner relating to the financial affairs of the local public bodies.”22 The statute defines local public body as “every political subdivision of the state that expends public money from whatever source derived, including cities, towns or villages; drainage, conservancy, irrigation or other districts; charitable institutions for which an appropriation is made by the legislature; and every office or officer of any of the above.”23 The Division’s Financial Management Bureau provides and administers the online Local Government Budget Management System and is responsible for providing assistance and training on the system. The Bureau also provides local governments resources, including fiscal training manuals, news updates, and fiscal issue budget memos and training videos.24

North Dakota does not have statutes addressing fiscal procedures training for local governments. The North Dakota State Auditor’s Office reported they do not provide formal training to political subdivisions but rely on professional associations such as the League of Cities, Association of Counties, and School Board Association to provide training to their members. The State Auditor is frequently asked to speak on topics of interest to these organizations and will also provide information to the organizations on topics the State Auditor believes need attention.25 South Dakota statute states the Department of Legislative Audit shall prepare and distribute an accounting manual for counties, municipalities, school districts, and their agencies and update such manual periodically.26 The Department develops and maintains the accounting system for local governments. It also provides assistance to implement accounting systems for local governments by holding periodic workshops on basic accounting and completion of required annual report forms. Finally, the Department offers guidance on other matters of concern to local governments by telephone or on-site. 27 Utah statute requires each member of a local district board of trustees to complete training and obtain a certificate of competition within one year of taking office. The training is required each time an official is elected or fills a mid-term vacancy. The statute further requires the State Auditor to develop a training curriculum in conjunction with the Utah Association of Special Districts and

21 Nebraska LB781 2020. 22 NMSA § 6-6-2. 23 NMSA § 6-6-1. 24 New Mexico Department of Finance & Administration, Local Government Division, Budget & Finance Bureau Website. 25 North Dakota State Auditor’s Office, Division of Local Government Audit. 26 SDCL § 4-11-6. 27 South Dakota Department of Legislative Audit website. https://legislativeaudit.sd.gov/about.aspx.

20IB004 • RESEARCH AND EVALUATION DIVISION • 200 W. 24th Street • Cheyenne, Wyoming 82002 Telephone 307-777-7881 • Email [email protected] • Website www.wyoleg.gov PAGE 8 OF 8 carry out the training of members of local district boards. The State Auditor must ensure the training complies with Utah Code § 63G-22, State Training and Certification Requirements, which mandates the training be made available in an online web-based format, subject to certain exceptions. 28 The Utah Office of the State Auditor Local Government Resource Center webpage lists required and suggested training and certification content; which includes local, district, special service district, and board member training. Training is accessed through the Office of the State Auditor’s online training portal or YouTube channel.29 The 2020 training course curriculum includes: qualifications and responsibilities, policies and procedures, introduction to budgeting, government records access, separation of duties: clerk & treasurer, ethics and nepotism laws, and fraud risk assessment overview. The webpage also provides forms, manuals, and guides on uniform accounting methods and other topics.30

28 Utah Code § 17B-1-312 and § 63-22-103. 29 https://training.auditor.utah.gov/ 30 https://resources.auditor.utah.gov/s/

20IB004 • RESEARCH AND EVALUATION DIVISION • 200 W. 24th Street • Cheyenne, Wyoming 82002 Telephone 307-777-7881 • Email [email protected] • Website www.wyoleg.gov