Summer 2016 Today Government Banking

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1 Summer 2016 Today Government Banking In this issue: Strategies for more effectively recruiting financial professionals States can generate more revenue by modernizing their approach to unclaimed property Working capital review helps drive payables efficiency, higher cash flow Upcoming conference schedule & contacts Strategies for more effectively recruiting financial professionals Government agencies must overcome several challenges when recruiting finance talent. To start with, few in government can offer the salaries that some corporations do. In addition, government agencies are often mistakenly viewed by candidates as antiquated, not progressive, and mired in red tape, says Cory Kampf, finance and central services division manager with Anoka County, the fourth largest county in Minnesota, located just north of Minneapolis. Another hurdle agencies face is that few colleges cover government accounting in any depth, Kampf says. The superficial overview students often receive rarely provides a sound understanding of the role and importance of the discipline, he says. Furthermore, the small size of finance departments within many government agencies can lead prospects to assume advancement opportunities are limited. Finally, agencies typically find that most qualified candidates with several years of experience are already employed and not necessarily looking for new jobs, says Jessica Atkinson, human resources administrator with Truckee Meadows Water Authority in Reno, NV, which serves about 385,000 customers. Conference participation Kampf is active in the Minnesota Government Finance Officers Association (GFOA), a sponsor of the annual Accounting & Auditing Student Conference held in Minneapolis. By hosting a booth and providing speakers at such events, agencies can show accounting students the opportunities available within government finance. It gives us a forum to reach them, Kampf says. Internships and mentorships Both Anoka County and Truckee Meadows Water Authority have partnered with universities to develop internship programs. Bringing students into the agencies can offer them realistic and positive views of the role of finance within government. Kampf and Atkinson say they utilize several strategies to overcome these challenges. The Minnesota GFOA also has a mentorship program that links newer government finance professionals with

2 continued more experienced ones, either within their agency or at another one, for a year. The networking component of the program is key, as advancement in government finance can mean moving from one agency to another. The mentorship program has allowed mentees to increase their knowledge of available opportunities, Kampf says. Strong benefits packages While the salaries may not match those in the private sector, many government agencies offer strong healthcare and retirement benefits. The challenge is to make candidates aware of all that we offer, Kampf says. Using a recruiting firm When evaluating potential candidates, both Atkinson and Kampf look not just for technical expertise, but for the candidate most likely to fit the culture of their agency. Given the small size of Truckee s finance department about 10 employees Atkinson says she typically needs finance professionals who can make decisions and manage others, yet also are willing to roll up their sleeves and get work done. For instance, even the organization s CFO may need to research general ledger issues, she notes. Meanwhile, Anoka County looks for candidates comfortable with its collaborative, team structure. A lot of times, we can teach the technical skills, but we can t teach values, Kampf says. A social media strategy? Both Atkinson and Kampf have considered using social media as a tool for recruiting candidates, but so far they ve decided against it. Privacy concerns, time constraints and hiring regulations, such as rules giving veterans preference over some other applicants, make social media a less attractive recruiting tool than it might be for private companies, they say. Long-term and win-win While government agencies face challenges in finding qualified financial professionals, when they do identify the right candidates, the relationships tend to be long-term and beneficial to both the agencies and the employees. We have really low turnover, Atkinson notes. To find such individuals, Atkinson works with a Reno-area recruiting firm whose partners are really in tune with the financial community. They re able to reach finance professionals who are employed, but open to new opportunities, and since using the firm our recruiting success rate has gone up exponentially, Atkinson says. Summer

3 States can generate more revenue by modernizing their approach to unclaimed property States could generate significantly more revenue through escheatment if they would do a better job of getting corporations to comply with the statutes requiring them to report abandoned or unclaimed property, according to a legal expert. Efforts to drive compliance through audits are costing states big money and are often inefficient, according to Mark Paolillo, a principal and practice leader in the Abandoned and Unclaimed Property area at Ryan, LLC, a Dallas-based global tax services firm. There are billions of dollars in unclaimed property within corporate America, Paolillo says. If reported by corporations as required, many of those dollars could ultimately end up in state government coffers, since the property re-claim rate by individuals in the escheatment process is quite low, he says. If states can overcome this pervasive non-compliance, they can generate revenue without raising taxes, Paolillo says. The key is modernizing their approach to the whole process, and Paolillo offers three suggestions for doing so: 1. Formalize audit programs. Develop standardized and written audit procedures that state-employed auditors and contracted auditors can follow. If these procedures are shared with corporations in advance, they will be ready to cooperate and have the best information already available when the audit begins, Paolillo says. The biggest complaint you hear from corporate America is that they don t have audit guidelines, Paolillo says. When you have a state or federal [tax] auditor come in, companies usually know and understand the procedures that they ll undergo in an audit and there s more of a trusting relationship there. In the unclaimed property arena, contracted auditing firms often don t follow very formal procedures, and that creates a lot of mistrust. Summer

4 continued Corporations can be more helpful if they don t have to undergo a fishing expedition type experience, Paolillo says. States can add efficiency to the process by letting corporations know up front what procedures to expect, what issues are going to be reviewed, how far of a look-back is going to be performed, the range of potential assessments of interest and penalties, and so on. States or their contractors can work through more audits that way, Paolillo says. That s important, he adds, because states don t get an assessment until the end of an audit. 2. Revise statutes and regulations. Revisiting outdated statutes and regulations to incorporate modern business practices would go a long way toward increasing reporting and auditing efficiency, Paolillo notes. There is a need to update these laws, many of which are from the 1950s, Paolillo says. They say things like: Anything else we haven t named [in this statute] is also reportable. I think that frustrates some companies. Paolillo encourages states to cooperate with the Uniform Law Commission (the National Conference of Commissioners on Uniform State Laws), which is working on updating uniform state legislation on unclaimed property. 3. Electronic reporting. Each year, companies can spend hundreds of hours filling out and mailing or faxing a variety of forms in each state in which they do business. Paolillo says electronic filing, which is well established in the income tax arena, would help to improve unclaimed property reporting compliance, while the resulting databases would make the states research and accounting tasks easier. Not all states have e-filing, Paolillo points out. That means they re still processing paper. Electronic reporting would allow states to collect and understand the compliance picture on a more sophisticated and targeted level. Bronze Ickes, CTP, AAP, Assistant Cash Manager & Investment Officer, State of Alaska, Department of Revenue, Treasury Division was an excellent partner during the conversion of our multiple ACH origination programs. The transition of nine distinct ACH origination programs was a smooth one, which finished well ahead of schedule. The implementation team was professional and knowledgeable about their systems and solutions applicable to the State of Alaska s business needs. The implementation specialist assigned to our project was very competent and outstanding at managing the project to include developing project plans, scheduling and documenting meetings, and monitoring the deliverables to achieve success. This was the third transition we had been through with this process, and was, by far, the smoothest. After three years in production, the ongoing customer relationship with continues with prompt and courteous service. Summer

5 Working capital review helps drive payables efficiency, higher cash flow has created a consultative-based approach to deliver working capital efficiencies for its government clients. In one recent example, we helped a government client dramatically improve its payables efficiency, implementing a relationship that has since driven cash flow higher to support reinvestment in growth and development. provided the institutional client with a Working Capital DNA Analysis, the bank s comprehensive diagnostic review of an organization s operating cash flow management processes. The review process included ongoing consultation with some of our veteran Treasury Management Consultants, followed later by a session where recommendations were offered along with a full implementation timeline and projected savings. Our recommendation to shift more check payables to a card payment program, to gain potential rebate benefits and efficiency, really hit home for the client. The paper-check approval process is cumbersome and expensive, the client s director of finance stated. I have limited staffing, so the more checks I can move to card payments, the less time my people will spend on payables processing. The client was impressed by the user-friendly and ideas-driven approach, wherein their treasury management and payments consultants came in, looked at our processes, and asked about all of the ways in which we were currently paying our vendors, including terms and payment methods. returned with a number of recommendations, but there was no hard sell. Contact your relationship manager for additional information on receiving a working capital review. Summer

6 2016 Conference Schedule July Oregon Association of School Business officials August Idaho Association of County Treasurers Conference Arizona GFOA 3-5 Maryland Association of Counties National Association of State Auditors, Comptrollers & Treasurers September National Association of State Treasurers County Fiscal Officers Association of Nevada Iowa League of Cities Oregon Association of County Treasurers and Finance Officers Bond Buyer s California Public Finance Washington Finance Officers Association Bill Collins, Head of Government Banking , william.collins@usbank.com County Special District Association Idaho City Clerks, Treasurers & Finance Officers Association Ohio Government Finance Officers Association Idaho Association of Counties Association of Indiana Counties Ohio Muni Electric Assoc./Ohio Public Power Education Institute Minnesota GFOA West Team Central Team Southeast Team Brigid O Callaghan, Market Leader brigid.callaghan@usbank.com Carol Gilstrap, Market Leader carol.gilstrap@usbank.com Marti Croak, Market Leader marti.croak@usbank.com Southwest Team Northeast Team Local Government Team Guy Candido, Market Leader guy.candido@usbank.com Great Lakes Team Lee Strom, Market Leader lee.strom@usbank.com Karen Bigelow, Market Leader karen.bigelow@usbank.com Jill Dunn, Market Leader jill.dunn@usbank.com usbank.com This information is for general purposes only and represents the opinion of. It contains information believed to be reliable, but is not guaranteed as to accuracy of completeness. This information is not intended to be a forecast of future events or a guarantee of future results.. Member FDIC (06/16) MMWR-92436