| Fiscal distress has been plaguing municipalities for decades and financial mismanagement has been identified as one of the primary causes of this distress. The purpose of the proposed study was to determine whether there is a relationship between the level of financial expertise held by a municipal council and the level of financial mismanagement experienced by a municipality in order to inform stakeholders as they develop strategies to mitigate financial mismanagement in municipalities. Participants were council members and city treasurers of the 55 WV municipalities whose 2013 financial statement audit was conducted by the WV State Auditor's Office. A Mann-Whitney U test was performed to determine the ranked difference in the level of financial mismanagement being experienced between municipal councils with financial expertise and municipal councils without financial expertise. The level of financial mismanagement being experienced was significantly higher for municipal councils with financial expertise, Mann-Whitney U = 6.000, Z = -2.036, p = .034. The results suggest that factors other than a municipal council's financial expertise may be effecting the amount of financial mismanagement taking place within a municipality. Based on the study findings it was recommended that (1) stakeholders of municipal governments (e.g., citizens, government leaders, local business leaders) advocate for stronger oversight of their municipality's financial operations and (2) council members who possess financial expertise take a more proactive role in helping the city treasurer to mitigate incidents of financial mismanagement. Additional research was recommended to (1) examine the financial expertise of the city treasurer and city manager to determine their effect on any financial mismanagement taking place within the municipality, (2) utilize a more inclusive definition of financial expertise that would take into consideration a council member's prior experience in local government management, a post-secondary education in business discipline other than accounting, and other business experience attained by the council members. |
