Report criticizes Hopewell treasurer role in fiscal issues, urges shift in accounting duties

HOPEWELL – The group hired by the city to get its financial house back in order is recommending that Hopewell push for a charter change that would transfer accounting functions now handled by the city treasurer to the city’s finance department.

In a report this week to City Council, the Robert Bobb Group said the transfer was needed to centralize the accounting process, something that has been lackadaisical in previous years. The treasurer is a separately elected official and not underneath the umbrella of city administration, and as such, there is a perceived power struggle over who controls the city’s purse strings.

Hopewell’s financial problems and how they were previously handled have been a political thorn in the city’s paw for several years. Because there was no centralized system, each city department basically handled its own financial records, and each had their own ways of managing them.

A MUNIS system was installed to serve as the city’s checkbook, but issues with development and poor staff training led to even more scattershot record-keeping. As a result, Hopewell had not turned in state-required audits of its money management since 2019, prompting the state Auditor of Public Accounts to red-flag the city as teetering on fiscal distress.

Tuesday night, council approved an RBG-recommended Memorandum of Agreement (MOA) between the city and the treasurer that would temporarily reassign the treasurer’s accountant to the Hopewell finance department until a permanent accountant can be hired by the city.

City Treasurer Shannon Foskey has been reticent about signing the MOA, which drew criticism from RBG that the office was being too territorial about its duties.

“This bifurcation of duties becomes less about accountability for the greater good of the city and more about power and control,” RBG wrote in its report. “The accounting functions of the city should reside in the office of the city finance director. The finance department and its director report to and are held accountable to the City Council appointee, the city manager.”

The report said improperly recorded transactions by the treasurer’s office over the years have “contributed to the financial management failures” in Hopewell.

“Further, because of the lack of timely recording, periodic monitoring reports such as budget to actual reports are virtually useless as a tool to manage the city finances,” it read. “It also does not allow for sufficient City Council oversight of financial operations for the city.”

RBG also suggested that Hopewell petition the 2025 General Assembly to amend the city’s charter to remove the treasurer’s accounting responsibilities and place them in the city finance department. The treasurer would still be responsible for printing and mailing real-estate and personal-property tax bills, monthly supplemental bills and delinquent-payment notices.

The MOA was discussed in a council closed-door session prior to Tuesday’s meeting involving RBG and Foskey. Foskey emerged from that meeting and sat quietly in the back of council chambers until the MOA vote was taken.

As she left council chambers following that vote, Foskey was hesitant to comment on the MOA. She said only that she would support anything “that was for the betterment of the city” and “what the city thinks is good.”

On a related note, council voted 6-0 earlier in the evening to pay RBG an additional $495,000 to help Hopewell finish up its work on reconciling the current fiscal-year budget and train staff on new modules council purchased a few weeks back. That funding would come from the 2024-25 budget council is expected to receive this week.

The additional spending brings the total cost of RBG’s work to around $2.3 million. It is the second amendment made to the agreement signed last year with an initial price tag of $988,000. Last November, council added $864,000 to that contract when RBG announced it had found additional problems that needed correcting.

Hopewell's money matters sparked the 2024 General Assembly to adopt legislation that establishes a procedure for Virginia to follow whenever a locality is tagged as a fiscal liability. That measure, which drew opposition from most of Hopewell's council for its overreaching nature, is on its way to Gov. Glenn Youngkin's desk with an amendment that limits the practice to localities with the Crater Planning District, which includes Hopewell.

Youngkin has until April 8 to act on the legislation.

Bill Atkinson (he/him/his) is an award-winning journalist who covers breaking news, government and politics. Reach him at batkinson@progress-index.com or on X (formerly known as Twitter) at @BAtkinson_PI.

This article originally appeared on The Progress-Index: Advisory firm asks Hopewell to shift accounting control from treasurer