Case Study

Creating Stronger Financial Accountability in State Government

SUMMARY/OVERVIEW

Turning Labor Agency Reporting Challenges Into Lasting Operational Improvements

When a state labor agency first sought help to improve its financial reporting, it was already at risk for increased scrutiny and reputational damage. Unreliable data and support audits made transparency and informed decision-making difficult for agency leaders. 

After completing a successful grants management project supporting federal funding oversight for the state, our team began work on the financial tracking activity. We quickly uncovered a greater need for stronger financial and operational management. Our work in the broader project scope helped the agency stabilize financial operations, document business processes, support modernization efforts, and build long-term accountability.

Key Takeaways

4

years of historical financial data evaluated and reconciled to support improved reporting and audit readiness

20

business processes documented, assessed, or redesigned to strengthen financial operations

50

financial, operational, and workforce recommendations developed to guide long-term modernization efforts

Woman signing papers.
The Challenge

Rebuilding the Foundation for Financial Management

The breakdown of financial reporting and internal controls over time challenged the agency’s ability to produce reliable financial information and support audit requirements. Critical processes were inconsistently documented, institutional knowledge had been lost through turnover, and key financial activities were difficult to track and verify.

These gaps left leadership with little confidence and limited visibility in the data used for supporting audits and long-term planning. The agency needed practical, data-driven recommendations that could restore financial accountability, audit readiness, and operational health.

Two professionals reviewing a set of documents.
The Approach

Understanding the Root Causes Behind Reporting Challenges

As our team reviewed financial reporting requirements with agency leadership and staff, we found that broader operational issues were undermining the reporting function. For a more comprehensive view of the financial foundation, we completed a business process assessment of workforce needs, internal controls, and reporting procedures. 

Key activities included:

  • Reviewing business processes and financial workflows
  • Evaluating internal controls
  • Guiding data cleanup and reconciliation efforts
  • Developing workforce recommendations
  • Documenting critical procedures and responsibilities
  • Supporting audit readiness efforts
  • Providing financial management guidance
  • Advising on the agency's transition to modern financial processes

Using stakeholder input and operational analysis, our team addressed the root causes of the agency’s longstanding financial management weaknesses. We developed recommendations leaders could use to reinforce accountability and improve financial reporting. Learn more about BDO’s government services. 

Professionals in a meeting.
The Results

Creating a Stronger Financial Operating Environment

The review findings gave leaders a more detailed picture of the staffing, process, control, and technology challenges affecting financial reporting and day-to-day operations. Our team helped identify priorities for stronger financial oversight, risk reduction, and operational improvement.

Key outcomes included:

  • Greater visibility into financial reporting processes and control gaps
  • Clear recommendations for building workforce capacity
  • Better documentation of critical financial activities and responsibilities
  • Support for ongoing data cleanup and reconciliation efforts
  • Recommendations for future technology modernization
  • Progress toward more reliable financial information and audit readiness

Our work addressed immediate reporting challenges but also went further in strengthening the agency’s financial foundation. The agency can continue to build data integrity and public confidence by managing resources responsibly for the long term.

Financial reporting problems often fall outside of traditional accounting functions. Government leaders can reduce risk by tracking unreliable data back to the processes, controls, and staffing issues that produce it before investing in one-time cleanups. 

Government leaders need confidence in their financial information to make informed decisions and demonstrate responsible stewardship of public resources. By examining the underlying processes, controls, and operational challenges affecting reporting, we helped create a stronger foundation for the agency's future.

Katim Faal
Director, BDO Government Services