The Department of Revenue is recommending Arlington schools and town government move to a consolidated financial and administrative model, a move that state officials say could improve effectiveness and accountability in town operations.

State officials last week submitted a report that Town Meeting members requested in 2010. Members last year approved a proposal to study whether Arlington should merge town and schools finances, asking the town manager to research a consolidated finance department and report back to this year’s Town Meeting.

In the report, Department of Revenue officials wrote, “a government structure where town finance officers operate independently does not foster an environment conducive to strong financial management. “

“Lack of accountability to a full-time manager leads to fragmented fiscal operations, works against the implementation of regular, formal practices and inhibits an overall team approach to finance,” the report says. “Since many financial management operations cut across departments, they are most effective when managed in a centralized, coordinated structure.”

As it currently stands, the report notes, the town manager and deputy manager have “attempted to play a coordinating role with town finance departments.”

“But the reality is that cooperation is voluntary and none of these officials can be held truly accountable by the manager,” the report adds.

Town Manager Brian Sullivan said town officials are still digesting the report and he will not take an official position until he hears more.

“I think it’s too preliminary at this point to make any assumptions as to what will happen,” he said.

Sullivan added there are at least three additional steps before any changes could be put in place: The recommendations would first go to Town Meeting, then the state Legislature and finally put to a vote by town residents.

The Board of Selectmen is scheduled to hear more about the report at its meeting Monday, 7:15 p.m., at Town Hall.

Here are the state’s 15 recommendations, which can be read fully on the PDF file attached to the right of this article:

• Creating a consolidated finance department where appointed finance officers report to a finance director or the deputy town manager;
• Converting the elected treasurer/collector’s position to a position appointed by the manager;
• Making the director of assessing an appointment of the town manager—also considering making the Board of Assessors appointed;
• Including the comptroller in the consolidated finance department, but in order to preserve some independence for this critical position, that the position remain subject to appointment and removal by the selectmen;
• Exploring using the MUNIS budget module for departmental budget submissions and as a central database to store and track changes during the budget process;
• Including the payroll and purchasing functions in the consolidated finance department;
• While the town moves forward on the town-side restructuring of the finance offices, the town manager and school superintendent should work to address some of the outstanding issues with previous town-school consolidation;
• Purchasing and implementing an automated system for recording school staff absences and hiring of substitutes at Arlington Public Schools;
• Improving administrative capacity at the building or cost center level by school administration;
• Waiting until the town finance departments reorganize and issues with other shared services are resolved before the town proceeds with the merger of school and town finance functions;
• In planning the merged department, ensuring superintendent and school committee have access to a dedicated staff member with the required school business manager certification;
• Once the merged finance department is running smoothly that it conduct a complete review of the town’s budget format, chart of accounts and financial reporting;
• Town and school work to develop a written agreement concerning the allocation of municipal costs eligible to be included as “net school spending,”
• And School Committee chair review and sign the school payroll warrant only after it has been completed and gross salary information by employee is available for review.