David Yost pronounced the city of Akron’s second effort to correct longstanding accounting practices “workable,” thankfully closing a testy chapter that never had anything to do with missing money or the city spending beyond its means. The devil, as they say, resided in the details, in this case hundreds of separate funds the city used to keep track of its capital projects.
The practice dates back to the 1970s and early 1980s, when Roy Ray, a Republican, was city finance director and mayor. In a report for 2010, released in October, the state auditor called for a halt, finding negative fund balances of $87.8 million scattered among 740 funds. He placed the city in a new “fiscal caution” category.
Two months later, in reviewing the city’s initial response, Yost called for the elimination of all negative fund balances to be completed by the end of this year, faster than the city had proposed. He pressed for more details, at one point calling the plan “cursory,” urging the city to move “toward the path of fiscal stability,” even suggesting the City Council should approve a follow-up proposal.
The situation became further strained following a letter from Ray to Mayor Don Plusquellic. In the letter, Ray publicly criticized the “fiscal caution” tag when the city had a $5 million carryover balance and there were no signs of serious financial irregularities. In other words, the city’s finances were already on a stable path.
Meanwhile, the city’s follow-up response was in the works, awaiting Yost’s approval. The second plan showed much progress, the number of funds cut to 121, those with negative fund balances at 14, the total negative balance at $12 million. Yost asked for additional documentation. He did not find significant outstanding issues.
With that, the city has met the auditor’s fair request for a simplified and more orderly accounting. More substantive challenges remain, the city’s finances burdened by the slow recovery and reductions in state funding. The good news is, with the auditor’s issues resolved, full attention can be focused on meeting them.
