7 Reasons to Outsource Your Public Sector Accounting Functions in 2024

By: Lyndsey Fleser & Angie Stoneham

Historically, public sector accounting jobs were able to compete with the private sector by offering better benefits and work-life balance. But as local, state, and federal government agencies have been challenged to run leaner, benefits have continued to shrink, and staff have been asked to do more with fewer people.

“More than 300,000 U.S. accountants and auditors left their jobs in the past two years—a 17 percent decline in employed accountants and auditors from a 2019 peak,”  according to a 2022 article by The Wall Street Journal.

The pool of public sector accounting workers has taken an even larger hit.  

“Nearly a third of incumbent state and local public finance workers will reach retirement age within 10 years. The current workforce includes nearly 50,000 workers who are of retirement age today,” according to a September 2022 report by the Government Finance Officers Association (GFOA). The “demand for state and local public finance workers is far outstripping the incumbent supply.”  

In a field where it’s already extremely difficult to find qualified candidates for critical positions, the future only looks more challenging. Public sector accounting requires a specialized skill set to ensure operations are efficient and compliant and that they meet the day-to-day needs of their stakeholders. The ever-increasing number and nuances of governmental accounting standards now require a higher level of staff specialization than a few years ago. 

Why Should Your Local Government or School District Outsource its Accounting Functions? 

Consider these seven reasons…

You Can Save Money and Reduce Overhead.

Outsourcing can be more cost-effective than maintaining staff. There are significant overhead costs involved with hiring your own accountant or keeping an internal accounting department: salaries, benefits, payroll taxes, hardware and software, and other supplies. While it might seem like a lot, outsourced public-sector accounting can lower your total costs by eliminating many of these expenditures. You only pay for the services you need when you need them.

Increased Stability. 

A new hire can take anywhere between a month and six months to be onboarded, and it can take a year or more to train a new employee fully. Outsourced public sector accountants can be readily available to help your finance office not miss a beat.

Scalability. 

As key functions of the public sector ebb and flow, outsourced accounting providers can deliver support throughout the year as well as during critical points.

Up-to-date Knowledge and Expertise. 

Specialized public sector staff can assist your organization with all current local, state, and federal legislation that impacts your organization. Instead of focusing on becoming an expert on state compliance, tax issues, and audits, you can focus on the core service delivery areas that impact stakeholders the most. Outsourcing can reduce risk and protect your entity from potential fines, penalties, and legal issues.

Ever-increasing Reporting and Compliance Requirements 

SE-4096, SE-4094, L-4029, AOP, FID, SEFA, FERs, F-65, 5572, and FID are just a few examples of reports and compliance documents required by your organization over the next year. Any disruption in reporting could result in a delay in funding or a recapture of funds. Over the years, outsourced public sector accountants have successfully filed these reports for many organizations. Firms with outsourced accounting experts that specialize in helping governments, like Maner Costerisan, have the experience of knowing where to find the information and where to file.

Process Improvements.

Experts in public sector accounting can provide recommendations on policies, procedures, and processes to make your organization more efficient and transparent and address any deficiencies in your current financial reporting.

The Ability to Provide & Summarize Important Data. 

Maner Costerisan has extensive experience with similar size and demographic organizations, so we can bring industry-standard metrics to compare to your organization so you can make smart, data-driven decisions for your organization. Outsourced teams with deep government knowledge are also able to help summarize the data and present it to your board, stakeholders, or others in a way that they can understand.

We recognize outsourced accounting can look different for each organization, and that’s why Maner Costerisan offers flexibility to help when and where you need it most.

We can help with any of the following engagements:

• Short-term: Outsourced accounting can fill in any gaps in staffing due to retirements, resignations, PTO, illness, or injuries. Public sector outsourced accountants can jump in and hit the ground running with their extensive experience with various government or school district entities of all types, demographics, and sizes. Not only can we provide accounting services, but our team can also increase efficiency and productivity.
• Long-term: While hiring your own finance office may seem like a no-brainer, it’s worth reviewing the numbers and seeing what makes sense for your specific organization. Compensation and benefits add up quickly. Adding the cost of keeping your team trained and engaged with the latest compliance rules will require additional spending. Outsourcing to an expert on a long-term basis can be one way to lower costs and increase the ability for scalability as you need it.
• Specific Projects: Outsourcing to a highly experienced and qualified team, like Maner Costerisan’s governmental experts, can help with tasks such as filing financial reports, audit preparation, bank reconciliations, or budget planning, to name just a few. Our team can help with projects big and small, reducing the stress on your team and ensuring the right level of expertise is managing your project.

Interested in Outsourcing?

We understand that outsourcing is not one-size-fits-all; each of our clients has unique, individual needs. Outsourced public sector accountants can offer as few or as many hours as an organization needs in any given week and can support anything from annual responsibilities like budgeting and audit preparation to monthly reporting and bank reconciliations.

Our dedicated Municipal and Education teams can help you lower your costs, minimize disruptions to operations, and maximize the potential of your resources.

Contact Lyndsey Fleser, School Finance Manager, or Angie Stoneham, Associate and governmental expert, at maner@manercpa.com or call our office at 517-323-7500 to learn more about how we can help.