Lack of trained staff is the principal reason for the city’s inability to comply with state accounting standards, city accounting manager Karl Shaw says.

The recent addition of a staff accountant should fix the problem, he said, especially if the city maintains the position as full time.

“The problem hasn’t been the amount of staff, but the amount of qualified staff,” Shaw told the Bainbridge City Council’s Finance Committee Monday. “You can’t just hire accounting clerks.”

The committee quizzed Shaw on the causes of, and cures for, the scathing report the city received from state auditors last week.

City books for the years 1999 and 2000 were so incomplete and inaccurate that auditors said they could not determine the city’s financial condition.

“This is an administrative issue,” said committee chair Bill Knobloch, “but we want to make sure that you have the resources to do your job, and we want the mayor to know that she has our support.”

The auditor also noted that the city has filed its financial information with the state late in nine of the last 10 years.

The bookkeeping problems revealed last week were not new, Shaw agreed, adding, “When I came on in 1996, we were three years behind.”

The underlying problem, he said, is that while the city has several “accounting technicians” who make bookkeeping entries, it has not had a professionally trained accountant other than himself and Ralph Eells, finance director.

Such a position was budgeted last year, and accountant Orlando San Juan began work in January.

“We hired him to work on the 2001 reports, and we got them in on time,” Shaw said.

Shaw told the committee that he did not believe any city funds are missing, but that the records were not sufficiently complete to allow the auditors to double check.

The state’s report that a substantial number of checks written by the city could not be found was blamed on the city’s bank.

“When the bank reported that the city had issued 200 checks in a month, we did not go back and look through them to see that all 200 were there,” he said. But the bank has improved its procedure, he said, and that hand checks for 2001 and thereafter show that all checks are accounted for.

Shaw said he was to blame for the auditor’s notation that those responsible for overseeing cash management – namely, himself – also handled cash.

“On occasion where we had one accounting technician on vacation and another sick, we had only one left. I sat in on occasion so that person could take breaks,” he said. “But because I was also the person who checks at the end of the day to make sure things added up, I was essentially reviewing and approving my own work.”

The problem has been addressed by cross-training people from other departments to substitute for cash-handlers in an emergency.

Shaw said, though, that the accounting position is scheduled to drop to three-quarters time next year. Shaw said he was concerned that if the reduction occurs, San Juan might leave.

“We’re in the budget process now,” Knobloch said. “You might want to add that in.”

Shaw said the city staff has addressed other deficiencies pointed out by the state, but cannot be sure additional issues won’t crop up in the future.

“We believe we have addressed the issues that the state auditors brought up concerning the earlier years, but we cannot be sure there are not issues out there that they did not call to our attention,” he said. “And this doesn’t mean underlying issues of staff are fixed.”