Mission and Vision:

The mission of the Controller's Office is to ensure the city's financial integrity and to promote efficient, effective, and accountable government. The office strives to be a model for good government and to make the City a better place.

Overall Organization and Staffing:

Ed Harrington has served as Controller since 1991, and was appointed and confirmed in 2000 to a second ten-year term. Over time, the Controller's Office has worked to automate, decentralize, and streamline the City's financial and payroll operations. The City has been transitioned from systems that were largely based on paper document processing, to systems that are on-line and rules-based. The nature of the work done by Controller's staff has similarly changed-where formerly we reviewed a large volume of documents and entered data to the financial systems, we now review and approve transactions on-line, provide guidelines and training for financial staff citywide, conduct post-audits of the city's financial activity, and do reporting and analysis. Accounting and payroll staff and capacity are spread citywide, and the City uses the effort and expertise of the departments to run more of San Francisco's day-to-day financial operations. Reflecting these trends, the Controller's staff has decreased the number of its staff 35% overall in the 12-year period, from 219 to 142 people, representing a savings to the City of approximately $5.6 million annually. Today, the Controller's Office is continuing to increase its post-auditing capability, implement improvements to financial reporting, improve the efficiency and accuracy of payroll operations, and develop the office's ability to provide high-level reporting, reconciliation, performance measurement, and problem-solving services.

Accounting Operations and Systems

· San Francisco was among the first large cities to implement the new reporting model of Government Accounting Standards Board Statement 34 (GASB 34)-a full year before the required deadline. The Controller's Office provided training to all city departments on the GASB 34 model, developed database reports supporting the City's analytical needs, and received a Government Finance Officers Association Certificate of Achievement for Excellence for San Francisco's presentation of the Comprehensive Annual Financial Report (CAFR) in the GASB 34 format.

· The City's financial and budget information is housed on mainframe computer systems. While inquiry and transaction screens answer most questions regarding balances and accounting activity, most high-level reporting and analysis, and some low-level, (payroll-based) reporting and analysis formerly required a programmer to write or access report specifications. The Controller's Office has addressed these issues over time by building PC-based databases and by developing, for citywide use, the Executive Information System (EIS). EIS is a user-friendly, point-and-click style interface to the financial information stored on the mainframe. EIS has both standard reports and ad-hoc reporting capability and City departments use the system to meet a wide variety of their needs for reporting and analysis. The Controller's Office is engaged in an ongoing process of expanding and developing EIS capabilities in response to the City's needs and customer requests.

· The Controller's fund-accounting staff carry out an annual process, the post-audit review, which samples and tests accounting transactions from 80% to 100% of City departments, provides detailed reports of the types and amounts of exceptions found, and follows up with training tailored to the needs of the departments. The post-audit process has both increased its scope and has helped effectively reducethe rate of errors and exceptions found in the last two fiscal years.

· In FY 2000-2001, the Controller's Office initiated a process to simplify and consolidate the City's special funds by creating a standardized categorization system specifying how the fund's finances are to be managed. Outmoded and inconsistent fund references in the City's codes were repealed as part of the effort. The new code language developed, Administrative Code Section 10.100, also reduces the analyst time and discretion to manage special funds and simplifies reporting.

Payroll and Personnel

· Beginning in FY 1998-1999, the Controller's Office developed a new, rules-based time entry system, replacing archaic and labor-intensive data entry processes. In simple terms, the Time Entry and Scheduling System (TESS) insures that City employees only receive pay for which they are eligible. Payroll clerks no longer manually confirm the eligibility of individual employees for hundreds of special pay codes-rather, the exact terms of the City's Memoranda of Understanding with more than 40 labor unions are built into TESS. The system replaces manual processing of timesheets with on-line time recording and on-screen system edits. It has substantially reduced the error rate, processing time, and effort needed to record employee hours and pay. The system has been successfully rolled out to 85% of all departments, with the Payroll Division providing training and problem-solving on-site.

· At the calendar year end, the Payroll and Personnel Services Division conducts the reconciliation, reporting and problem-solving tasks necessary to issue W-2 statements to the City's approximately 29,000 employees. In each of the last three years, W-2s have been issued within 14 days of the end of the calendar year, well in advance of the January 31 deadline.

· Payroll and Personnel Services has steadily worked to increase the percentage of employees receiving direct deposit of their paychecks. Of the approximately 29,000 employees currently receiving checks each pay period, approximately 80% now have electronic fund transfer from the City to their bank account. In addition to the convenience to employees, direct deposit increases biweekly payroll processing efficiency and greatly reduces the City's risk for fraud and theft.

· The Payroll and Personnel Services Division has recently initiated a process to automate and web-enable payroll information. Currently, city employees with direct deposit receive a paper pay stub listing the necessary deductions and the net amount of the deposit. In FY 2003-2004, the department will eliminate these "advice of deposit" records and transition to a paperless system. Employees will be able to access their payroll information through a secure, web-based information system. The Controller's Office is currently working on solutions for employees without day-to-day access to computers by providing telephone, fax and other access points. This initiative will reduce printing, production and paper costs and eliminate biweekly distribution costs in the Controller's Office and citywide.

Audits, Performance Measurement, City Projects

· Over the most recent five-year period, the Controller's Office has significantly increased and improved its capability to provide auditing, performance measurement, and management and technical services to departments. These divisions represent the Controller's efforts under Charter and Administrative Code mandates to increase the effectiveness and efficiency of city government.

· The total number of audits completed increased from 43 in 2001 to 65 in 2002, while the cost per audit dropped for all major categories of audits-concession, financial and performance. At the same time, the Audits Division has also provided special reporting and other needed services, such as a program to train non-profit service providers on compliance with City contracting requirements.

· Departmental management audits and special reports issued by the Performance Audits group have grown in scope and complexity, providing services and information not available from any other source. An audit of the City's provision of homeless services, and a forthcoming audit of the City's efforts to affect job training and the labor market contain analyses of policy issues that cross the City's organizational lines, giving policymakers critical tools and information for the budget and legislative processes.

· The Controller's Performance Measurement unit, created in FY 1997-1998, has built citywide participation in the Code-mandated effort to track public service delivery in terms of quality, quantity and effectiveness. Beginning in FY 2000-2001, performance information has been brought into a database designed by in-house staff that allows the Controller's Office and departments to develop the quality and reliability of the data used for measurement. The database is also designed to allow the City to track year-to-year change consistently, populate the Mayor's budget book directly with performance information, and provide reports for policymakers. The data is also used to inform the City's participation in national comparative performance and best practice surveys such as that administered by the International City/County Management Association (ICMA).

· The Performance Measurement unit annually directs and publishes the City's major scientific sampling of citizen opinion-the Citizen Survey. Since the advent of district elections, the Controller's Office has also provided district-level analysis of the survey data-giving each Supervisor a look at how citizen opinion in their district differs from the citywide statistics. In June of 2003, the Controller's Office published, for the first time, a web-based Community Indicators Report compiling, linking and graphically displaying information on San Francisco's economy, education, health care, housing, transportation and other critical measures. These indicators of the City's success and progress as a place to live, work, and visit will be added to and updated throughout FY 2003-2004 to inform citizens, policymakers, and government agencies as they plan and provide service to the public.

· The City Projects group, created by the Controller with the assistance of the Mayor in FY 2000-2001, provides critical short-term analytical, technical and managerial services to City departments. The group also allows the Controller's Office to maximize the benefit of its audit function by providing assistance to departments who need help to implement audit recommendations. The group has implemented service improvements in health, safety, and in public information provided by the City, among other areas.

· In each of the last two labor negotiation cycles, in FY 2000-2001 and 2002-2003, the City Projects group provided analytical support and cost estimates of the proposals exchanged by the City and the unions in the collective bargaining process. This service has meant both a significant improvement in the City's ability to manage and understand the costs and implications of its labor agreements, and an improved process, helping the parties to avoid arbitration and reach agreement within Charter deadlines.

Budget and Analysis Division

· The Budget and Analysis Division initiates budget process and systems improvements on an ongoing basis. All departments with mainframe access have been trained to use the Budget Preparation System on-line, replacing manual submission of reports. The Controller's Office created an MS Access database that is used daily to provide the information required by the departments, Mayor's Office, and Budget Analyst for their various analytical and reporting needs. The Controller's Budget Unit itself has reduced the time it requires to balance and clear errors from the budget data, allowing more time for the departments, Mayor and Board to work on the budget. Overall, the Controller's Office provides more analytical support to the Mayor and Board annually, and has facilitated changes to the budget process requested by the Board-balancing and publishing budget data earlier in each of the last two years.

· The Controller's Budget and Analysis Division is improving the City's projection and tracking of revenues citywide. Templates were developed and provided in the FY 2003-2004 Budget Instructions to help city departments better capture and analyze their actual cost of services and the revenues recovered. This information will allow fees and service charges to be more rigorously justified and annually updated by the departments on a consistent basis, and will assist the Controller's Office effort in FY 2003-2004 to maintain complete and consolidated information on these and all other city revenue sources. In the last two years, Controller's staff have instituted improvements to the City's documentation and analysis of major revenue sources, and have published a compilation of statistics, trends, sensitivities, and relevant law on the Controller's website for public use.

· The Six and Nine Month Budget Status Reports prepared by the Controller's Office have been increased in scope in the last two fiscal years-giving economic trends, factors affecting the City general fund, and reporting more information of interest to policymakers and the public, such as comprehensive mid-year projections of revenue, and the City's compliance with Charter-mandated baselines.

· In response to requests from the Board, Mayor, and the public, the Budget and Analysis Division now provides a high volume of special reports and general economic and market analysis, in addition to the city financial analyses which comprise its core function. In recent years, the Division has provided labor market and economic analysis for union negotiations, special analyses of the taxi industry for rate-setting processes, analysis of city insurance functions (with the City Projects group), and the analytical work for the Rainy Day Reserve Charter amendment proposal, among other products.

Administration

· In response to a growing need for accounting skills citywide, the Controller's Office initiated the 1649 Accountant Internship program in the 1990s. The program includes a curriculum on San Francisco and general governmental accounting procedures and municipal administration taught by City staff, training on accounting, budgeting, and purchasing systems, and rotating placements in City departments for practical experience. Enrollees in the program include both current employees upgrading their skills and new recruits to the City workforce. The highly effective program has graduated 59 fully trained governmental accountants since its inception.

· The Controller's Office carried out two moves-into City Hall, and, for the Payroll Division, into 875 Stevenson Street, in recent years. Public service was been improved in each case-counter facilities in payroll, claims processing, and the property tax offices were improved and increased security provided. Public assistance is available at the main office in Room 316 from 8am to 6pm daily, where front desk staff respond to a wide array of requests for financial and general city government information, and provide referrals.

· The Controller's website, redesigned by staff in FY 2002-2003, is now improved and more accessible to the public. Standard reports such as the CAFR, AAO, Six and Nine Month Budget Status Reports, Citizen Survey, and Audit Reports are available for multiple fiscal years and are clearly labeled and grouped. A prominent News and Events link gives the most recent information published by the Controller's Office, and links are provided for employment, budget reports and instructions, and other frequently requested information.

The Controller's Office will continue to plan for and implement improvements and upgrades in the City's financial, payroll, audit and related functions on an ongoing basis. The Office seeks to achieve excellence, to understand and meet the needs of its customers, and to make San Francisco's public management responsive to the changing environment and to the needs of the City and its citizens.