August 1, 2014

Medina
Sunny
77°F

Two vie for Medina finance director

Medina Finance Director Keith H. Dirham seeks a third term in November, but newcomer Stacy Bonitz aims to win his seat.

Q: What are your qualifications to serve as Medina finance director?

Bonitz: First, experience. Not only the depth of my experience and contacts working for the Greater Medina Chamber of Commerce, but add to that the perspective that comes from working in a number of roles during my almost 20 years of accounting background, each with a different perspective on how the city’s Finance Department interfaces with the public. I have worked hands-on, in the industrial sector as an accountant and a controller. I have worked in the public as an auditor with Ernst & Young, and I have depth of experience in the nonprofit accounting world, as well, as I worked as the accountant at the Greater Medina Chamber, accounting consultant for United Way of Medina, and I have co-founded the Trinity Rose Foundation. This background gives me the perspectives needed to think about issues differently while I craft what’s best for Medina’s Finance Department and our citizens.

Second, track record. I am proud to have received excellent reviews, year in and year out.

Finally, communication. I am confident in the fact that I can communicate financial information and options to those I work with in ways that they understand.

Dirham: My most obvious qualification to serve as Medina’s finance director is the success the Finance Department has had under my leadership over the past eight years. Additionally, my previous experience with the State Auditor’s Office, my educational background, and the fact that I am a certified public accountant serve as qualifications for the position.

Q: What steps, if any, are needed to ensure Medina passes state audits?

Bonitz: I need to take half a page to explain something. Some will tell you that we’re not failing state audits and that my claims to clean this up are overblown. I want to make sure The Gazette, and your readers, understand what I mean when I say “I will clean this up.” I want to clarify some definitions:

“Failed”: This is my way of communicating the issue. I refuse to hide behind government/financial terms. For me, if you don’t pass, you’re failing your constituents.

“Qualified”: This is my opponent’s way of communicating the audit issue. This is basically “government-financial talk.” There are three levels of performance for audits in the State of Ohio:

– “Unqualified opinion” — while it doesn’t sound like it, this is actually good. It means the auditor for the state believes your financial statements accurately represent your city’s financial reports in accordance with accepted accounting principles.

– “Qualified opinion” — It means the auditor has found some issues with the audit and believes there is “a material departure from generally accepted accounting principles.” This is where Medina’s audit has been every year under our current finance director.

– “Adverse opinion” — this essentially means the auditor/state believes the financials cannot be trusted.

I would suggest we go beyond just passing and it’s time to excel. To do this, first — we need to address our fixed asset system. This is why we’re failing the one part of our audit (there is a second part that we need to improve upon, too). There’s no excuse for it not to be addressed. It never would have taken $100,000 to fix; it would have just taken effort.

Dirham: The city of Medina has never failed an audit. My opponent’s allegations of failed audits are loosely based on a qualification in Medina’s audit that existed since before I became finance director. The qualification stated that Medina did not have adequate records of property and equipment (fixed assets). Therefore, in each year the auditor’s opinion stated that with the exception of the fixed assets, the city’s financial statements present fairly, in all material respects, the financial position of the city of Medina at year end and the results of operations and cash flows for the year in conformity with accounting principles generally accepted in the United States.

When I became finance director in 2002, I met with our auditors to discuss the qualification and what would be necessary to eliminate it. At the time, the city was required to use a $200 threshold and account for all city property with an original purchase price in excess of the $200. The beginning balance when I became finance director was unknown. Therefore, I spoke with our auditors and several other municipal finance directors and determined that a project to inventory every item in the city’s possession with an original purchase price in excess of $200 was not something the city could accomplish internally.

I explained all of this to the city’s management team and at the time the city simply did not have $100,000 to spend on the project. Additionally, the qualification was not costing the city any money.

While the qualification could possibly affect the city’s bond rating, the city issued bonds during 2001 (before I became finance director) and again in 2002, but those issues were conducted before any audits of years during which I was finance director were available. The city has not issued any bonds since 2002. Therefore, the only benefit to spending the $100,000 would have been to make me look good.

Back in 2002 I explained two things to Council. First, I asked that we eliminate the qualification before conducting any additional bond issues. Second, I explained that an upcoming accounting rule change would allow the city to substantially increase the threshold amount referenced above. I went on to explain that with a higher threshold amount the city might be able to conduct the inventory internally thereby saving the taxpayers of Medina $100,000.

The accounting rules have been changed so that a threshold amount of $10,000 is now acceptable. Obviously it is much easier to account for all city property with an original purchase price in excess of $10,000 than to do so for all property with an original purchase price in excess of $200. Additionally, the City has maintained adequate records of additions and deletions since I became finance director in 2002.

I have been working with the administration and various department heads on this project for many years and I am happy to report that the city’s 2008 audit was sent by our auditors to the State Auditor’s Office without the qualification.