Financial Management Practices for School and Local Government Officials
Vermont citizens trust that elected public officials and employees are wise custodians of their tax dollars. Public officials validate this trust by employing strong financial management controls and ensuring that the books of accounts accurately reflect the financial activities of the fiscal year.
Vermont law requires that school districts, towns and cities account for the monies entrusted to them and that these records be audited (see 24 V.S.A. §§ 1681-1686 and 16 V.S.A. § 323).
The Auditor's Office receives many calls each year that pertain to financial management practices at the town and school district levels. Questions come from both local citizens and elected town officials and cover a variety of topics, from proper fund accounting to understanding budgets and audit reports to division of responsibilities. Vermont law relating to schools and municipalities can be vague and confusing, and clear lines of authority can sometimes be hard to identify. Added to that, the governance of municipalities and schools has grown increasingly complex, and with that has come expectations for greater accountability and transparency.
We have found that ordinary citizens and elected town and school officials alike can benefit from an annual review of their accounting practices and internal controls to improve financial management practices. Documenting those practices and making them available publicly improves communication and encourages elected officials to identify areas for improvement.
In 2012, the Legislature enacted an annual requirement for town treasurers to complete and provide to the selectboard, which shall acknowledge receipt and review, a copy of the internal financial controls document provide by this office (see link to checklist below(Updated 8/24/15). Likewise, each school superintendent is responsible for completing and providing a copy of a similar internal financial controls to all member district boards for their review document (see link to checklist below). These checklists provide a summary of key issues that pertain to adequate accounting, management, and reporting of tax and grant dollars in local government.
There are numerous free publications available to you through the Vermont League of Cities and Towns. Their toll free number is 800-649-7915, or visit the Vermont League of Cities and Towns Website.
Vermont State Auditor's Internal Controls Checklists
- Title 24: Municipal Government
- Title 16: Education
County Sheriff's Financial Management and Auditing
- 24 VSA §290b requires that the Auditor of Accounts adopt, and the Sheriff's comply with, a uniform system of accounts, controls, and procedures for the sheriff's departments.
- In April 2008, the SAO issued the latest version of the Uniform Accounting Manual to fulfill this requirement.
- Request a copy of the manual by email, call (802-828-2281), or send a request by mail.
- This statute also requires that the Sheriff retain a public accountant biennially to conduct an audit of the financial systems, controls, and procedures within the department and forward this report to the Auditor of Accounts and assistant judges.
- Read the Sheriff Audit Reports.
- Financial Management Checklist - Generic, One-Page - 2012
- Generic Checklist for Internal Controls (short) - 2012
- Municipal Checklist for Internal Controls (long) - 2011
- Internal Controls Checklist
- Internal Controls for Municipalities
- Improving Government Effectiveness
- VLCT Town Auditors' Workshop - November 16, 2010
- 21 Best Practices
- Segregation of Duties
- Do You Need an Audit Committee, Finance Committee or Joint Municipal Education Committee?
- Using Data Mining Techniques to Identify "Potential Improper Payments"
How Municipal Government Works
- Understanding town offices
- Vermont Municipal Law Index
- Search VLCT Resources
- Who is my town's Representative/Senator & how do I contact them?
- VLCT Handbook for Locally Elected Auditors
- VLCT Model Financial Policies
- VLCT Handbook for Vermont Municipal Treasurers
- VLCT Handbook for Vermont Municipal Clerks
- VLCT Handbook for Vermont Selectboards