Governments bear a vital responsibility to manage public resources, such as property taxes. This demands careful planning, stewardship, and efficiency. In today’s continuously evolving environment, like most industries, a government would need to frequently evaluate processes to cut costs, remain in compliance with laws and regulations, remain up to date with ever-changing standards, and ensure the latest technologies are being implemented effectively.

Municipal governments face ongoing shifts that heighten the demand for skilled professionals. . There is a growing need for public accountants, especially within the municipal sector. At the same time, the current pool of talent is declining. An excellent option for municipalities to fill this gap is by hiring consultants, in particular consultants from CPA firms which have the skillset necessary to assist with governmental financial reporting.

According to a recent article in 2023 published by the AICPA, the total number of accounting graduates has decreased approximately 16.9%. Other trends increase the concern, including the aging workforce of accountants approaching retirement age, decreased numbers in CPA eligible candidates, and lack of future growth of the accounting workforce. As such, municipalities must search for other options to remain efficient.

Dispelling the Cost Myth

A common misconception with the use of consulting in both private and public sectors is that consultants are more expensive than hiring full-time employees. However, this perception fails to account for the additional costs involved during the hiring and training process for a candidate to perform at the standards required by the governmental entity. Recruiting, onboarding, and developing new personnel to meet the standards required for governmental financial reporting is not only time-intensive but also costly. These costs often exceed the cost of a consultant.

Consulting provides the necessary buffer to assist in outsourcing tasks while the hiring and training is in progress. A consultant, especially from an accounting firm, has the necessary experience and knowledge to replace lost personnel and seamlessly keep regular operations moving forward. Additionally, since accounting firms are comprised of multiple employees and work in teams, hiring consulting services would utilize multiple talent for the same price, which contributes to additional efficiencies and cost savings.

Specialized Skill Sets and Technology Advantage

Accounting firms specializing in governmental accounting provide skill sets found in few industries. Consultants from accounting firms are often auditors by trade and are required to be up to date on new regulations and accounting standards and have the necessary tools to do so. They are required to consistently be knowledgeable and invest significantly in technology, including artificial intelligence (AI) to be competitive and cost effective. Auditors often rely on a time and expense budget to ensure efficiency and profitability and must have a solutions mindset to remain competitive. By hiring consultants, these benefits are shared with the government entity hiring said consultants.

Enhancing Audit Readiness

The solutions mindset, time constraints, and the variety of clients served create a unique benefit to governments, especially in preparation for an audit. Auditors are accustomed to working under tight deadlines and managing multiple clients with varying systems of internal controls. This gives auditors a different perspective and advantage to quickly provide unique solutions for consulting clients. This experience equips auditors to quickly identify deficiencies, implement solutions, and prepare municipalities for smooth, timely audits.

An audit consultant is not only knowledgeable about a municipality’s capabilities but also familiar with what the auditors request and the quality needed. A consultant can perform a “pre-audit” to identify issue and provide suggestions for corrective action prior to the audit commencement.

Adaptable and Tailored Services

Perhaps the most significant advantage of working with consultants lies within the flexibility of the engagement. A government is not limited to a one size fits all service and can tailor the engagement to meet specific needs. With consulting a governmental entity can outsource a set of tasks, duties, or perhaps an entire department. This adaptability enables governments to focus on higher-level projects while maintaining normal operations.

If your organization is looking for expert support on governmental financial reporting, contact us at (305) 662-7272 or email us at info@cflgcpa.com. We specialize in delivering tailored consulting services to support your financial success.