Organizational Oversight

What is Organizational Oversight and Why is it Important?

Board oversight of the organization may be the most complex of all of its responsibilities. This is especially the case for jurisdictions that hire a professional manager who serves at the pleasure of the board. These managers come to their jobs with a strong commitment to the principal tenets of the International City-County Managers Code of Ethics. These tenets commit managers to a high level of professional management (tenet #1) and independence, resisting “any encroachment on professional responsibilities, believing the member should be free to carry out official policies without interference, and handle each problem without discrimination on the basis of the principle and justice” (tenet #10). At the same time, the Code commits managers to “recognize that elected representatives of the people are entitled to the credit for the establishment of local government policies” and “responsibility for policy execution” (tenet #6).

Effective board oversight of the organization starts by recognizing this inherent tension between subordination and independence and by giving presumptive weight to the board’s decision to hire a fulltime manager to oversee the daily management of the organization. This becomes the starting point for crafting an organizational oversight role that is workable, that recognizes a high degree of managerial independence while providing the board with the information it needs to meet its responsibilities for policy execution. In Exhibit 1 we provide a summary of the most commonly used instruments for achieving these goals. These documents supplement other instruments that seek to clarify the boundaries between the manager’s role in providing oversight of the organization compared to the role of the board, including the language of the charter, the ordinance creating a full-time manager position and the language of the contract signed between the manager and the board.

Exhibit 1

Board Organizational Oversight Tools and Documents

Types of Tools & Documents	Purpose/Advantages
Board Evaluation of the Manager/CEO/ CAO	Set criteria and process for annual performance evaluation of lead person in charge of managing the organization.
Budget Guidance Document Service priorities Inflationary cost increases by category Salary adjustments Health care and pension percentage increases Revenue projections Internal cost allocation formula	Establish the agreed-upon drivers and parameters for the preparation of the proposed budget by staff to the board
Financial/Budget Control Documents Periodic one/two-page summaries of revenue & expenditure assumptions/projections	To maintain financial oversight by providing periodic reporting to elected council or its subcommittee of revenue and expenditures.
Long-term operating and capital asset expense projections	Allows for separate long-term tracking of capital replacement needs and program operating expenses. Provides administrators and elected officials with the lead-time necessary to make program adjustments as a result of changes in revenue and demand for services.
Policy on management of budget funds and appropriation controls	Ensures that funds are managed independently according to generally accepted accounting principles and practices. Policies include the amount and use of reserves and level of organizational authority needed to approve appropriated funds.
Annual year-end audit report	Ensures the board that the organization has accurately represented and reported the state of its financial health.
Long range fiscal impact statements for new initiatives	Provides the governing body with the information it needs to make long-term commitments.
Performance Improvement Developing metrics & processes Reporting results/outcomes	Periodic reports from the CEO on organizational performance improvement needs, initiatives, and accomplishments.
Intergovernmental Agreements	Provides the board with a master list of the number, kinds, purposes, and duration of all intergovernmental agreements.
Contracting Out Services	Provides the board with a master list of the number, kinds, purposes, and duration of all contracts.
Organizational plan for managing volunteers	Provides assurance that the organization is managing volunteers in a manner consistent with the organizational missions and risk assessment
Compliance and training plans to meet all state and federal mandates	Provides assurance that organization compliance and training programs are in place to meet legal requirements governing hiring, promotion, and termination; workplace safety; discrimination issues related to race, gender, ethnicity, sexual identity and age; and contracting and purchasing practices.

Example Document:

Clatsop County Long-range Financial Plan