I’ll be honest: I wanted to present on this topic because I felt like everyone was afraid to say it out loud. Whether you work in public accounting or for a local government, none of us are spared from what’s happening in our profession right now. We all know these problems exist. Some of you are living them. And I think the most useful thing I can do is bring it to the forefront, name it clearly, and talk through what we can actually do about it.
The heart of it is this: public finance is facing a silent crisis of high turnover and a shrinking talent pool that is threatening the long-term stability of local governments. The goal of this post — and my presentation at our Government Forum — is to understand the root causes of this workforce strain and think seriously about how to build a more sustainable, resilient financial team.
I also want to say upfront: it’s not all gloom and doom. But I do want to be honest that fixing a problem this large is like turning an ocean liner. It takes miles and hours to change direction, and a problem that has been building for years cannot be reversed overnight.
How Did We Get Here? A Perfect Storm
The current instability in local government finance is the result of what I would describe as a perfect storm of economic, structural, and political factors that really accelerated around the time of COVID. Several forces are converging at once.
The first is what’s been called the Silver Tsunami. As of 2024, Baby Boomers make up approximately 15% of the U.S. labor workforce, but they are disproportionately concentrated in senior, technical, and leadership roles — finance, engineering, healthcare, education, skilled trades — where expertise accumulates over decades, not years. Roughly 10,000 Baby Boomers turn 65 every day. Nearly 38% of the local government workforce is expected to retire within the next few years. And only about 12% of government organizations have formal succession plans in place.
The core risk isn’t vacancies. Vacancies can be filled. The real problem is the rapid loss of undocumented expertise — institutional knowledge about why decisions were made, how things actually get done, client and stakeholder relationships, and the informal know-how that never made it into any policy manual. Pew Research notes that Boomers staying longer delayed this knowledge cliff, but didn’t eliminate it. Losses are now compressed into fewer years.
Then there’s compensation. Nationally, state and local government workers earn approximately 17% less in wages than similarly educated private sector employees. Total compensation is roughly 12 to 14% lower even when benefits are included. It wasn’t always this way — in 2011, according to Brookings and the Federal Reserve, state and local government workers actually had about an 8% total compensation advantage over the private sector. By 2023, that had flipped to a 7% disadvantage. Pay increases have often lagged inflation, resulting in real wage declines, and turnover costs localities an estimated 16 to 21% of salary per employee lost.
Add to this the 2025–26 federal workforce reductions, which have a multiplier effect on local tax revenues as fewer high-earning residents means reduced funding and hiring freezes. Layer in lingering COVID-19 burnout. And then there’s the profession’s own perception challenge — research from the AICPA, CAQ, and MPAG consistently shows that accounting struggles with image, not value. Accounting is about decisions, stewardship, and trust. We need to do better at communicating that.
What This Means for Audits
From my vantage point managing both governmental audit clients and pre-audit engagements, I’ve seen the snowball effect of workforce instability play out repeatedly. Long-tenured finance and treasurer’s office staff retire, creating a ripple that runs through the entire organization. The remaining employees absorb the work until replacements are hired — but even new hires take significant time to become self-sustaining.
We’re seeing weakening controls as normal operating checks erode during transitions. We’re seeing missed bond rating deadlines, potential ratings downgrades when audits aren’t completed on time, and missed state and local compliance deadlines. And we’re seeing single audits become high-risk engagements — instead of auditing the normal 20% coverage of federal expenditures, we’re sometimes required to double that to 40%.
Pre-audit engagements — where a CPA firm works with a locality before the external audit begins to help complete year-end accounting tasks and ensure records are audit-ready — almost always arise out of necessity rather than preference. The triggers are typically staff turnover, repeated audit delays or findings, or auditor recommendations. I mention this not as a sales point, but because recognizing these patterns early gives localities more options.
How CPA Firms Can Help
I want to be clear: this isn’t a pitch. I genuinely want localities to know what resources exist so that when you find yourselves in a difficult spot, you know you have options.
CFO-for-hire arrangements provide experienced financial leadership on a temporary basis without the delay or risk of a permanent hire. A senior finance professional can temporarily fill a role like finance director, CFO, or controller — full-time, part-time, or for a defined period — overseeing day-to-day operations, managing month-end and year-end close, serving as the primary liaison with external auditors, and maintaining continuity in budgeting, cash management, and reporting.
Pre-audit assistance, as I mentioned, helps localities complete year-end accruals, capital asset updates, account reconciliations, journal entries, and work paper roll-forwards before the audit begins, so that the audit itself can proceed more smoothly and efficiently.
ACFR preparation is one of the most time-consuming tasks a finance department faces. External auditors are often more efficient at this because they already have access to the trial balance, work papers, and documentation. For localities with limited staffing or frequent turnover, delegating ACFR preparation can be genuinely cost-effective and avoids the overtime burnout that often comes with year-end close.
Finance staff audit training is a newer offering we’ve developed, led by Anne Genova, a senior manager in our Roanoke office who has a background in teaching and a genuine passion for helping clients build capacity. She works with locality staff on how the audit process works start to finish, documentation expectations, common findings and how to avoid them, and cross-training plans for key functions.
And finally, internal control consulting — including agreed-upon procedures engagements — allows a locality to define the scope and direct the testing. When turnover creates control gaps, having an outside set of eyes helps identify design weaknesses before they become audit findings or, worse, fraud opportunities.
The most important thing I can say is: don’t be afraid to ask for help. I struggle with this myself. The risk of believing you can handle it alone — whether out of pressure, pride, or just being overwhelmed — is that you find yourself deep in a snowball effect that’s much harder to reverse. Acknowledging you need help and acting on it early is the best possible move.
How Localities Can Help Themselves
There is also a great deal localities can do internally. Creating process narratives and flowcharts for key functions like cash receipts and disbursements, payroll, grants, and journal entry approvals ensures that knowledge lives in documentation, not just in people’s heads. Developing position-specific audit playbooks for roles like finance director, grants manager, and payroll supervisor helps ensure anyone stepping into that role understands the full scope of their responsibilities.
A standard PBC request library — with clear descriptions of required support, examples of acceptable documentation, and the responsible role identified — can dramatically reduce the scramble at audit time, especially for new staff unfamiliar with what auditors need. I’ve seen localities build shared drives organized by year and area for exactly this purpose, and our firm recently implemented SureLink, a project management tool that tracks the status of audit requests in real time, which has been a significant improvement for both sides.
Interim financial close practices — monthly or quarterly bank reconciliations, balance sheet roll-forwards, grant revenue reconciliations, journal entry reviews — mean that year-end close is no longer a single massive event. Errors get caught earlier. Trial balances are cleaner at the start of the audit. Stress levels drop.
And when turnover breaks segregation of duties, the answer isn’t to throw up your hands. It’s to identify the control gaps, design temporary or permanent compensating controls, update documentation to reflect current staffing realities, and train managers on their review and oversight responsibilities.
One thing I want to name specifically is knowledge hoarding. I have seen it happen — key employees who, for various reasons, accumulate all the know-how about critical processes and don’t share it. When that person leaves, the locality is left scrambling. Cross-training and delegation aren’t just best practices. They’re essential. And the way to make them feel appealing to staff is to frame them as growth opportunities — preparation for the next role, the next promotion.
Building the Pipeline
Ultimately, every audit delay, every vacancy, every succession crisis traces back to the same root problem: we didn’t invest early enough in the pipeline. Talent pipelines do exist. Knowledge pipelines largely do not.
One program I’m genuinely enthusiastic about is CPAs in the Classroom, run by the VSCPA. It connects Virginia middle and high school students — and college students — with accountants and CPAs to explore careers in accounting, debunk myths about the profession, and hear firsthand what makes these careers fulfilling. Brown Edwards participates actively, and I have personally spoken to accounting classes at the university level. It’s rewarding in ways I didn’t fully anticipate — seeing students come up after a presentation to ask about the profession and internships is genuinely encouraging.
Internships at localities are another underutilized tool. For public accounting firms, internships are one of the primary pipelines for future employees. The same logic applies to local governments. An internship is a trial run — the locality gets to evaluate the person, the student gets to evaluate the work, and sometimes they discover it’s not for them, which is itself a valuable outcome.
On the compensation side, targeted pay adjustments for hard-to-fill roles, modernizing complex grading systems toward more merit-based structures, offering flexible or tiered benefit options rather than one-size-fits-all plans, and using non-pay incentives like flexible schedules and telework are all strategies worth considering. And supporting economic development to grow the local revenue base gives localities more room to address compensation challenges without relying solely on tax increases.
AI as a Tool, Not a Replacement
A question came up during the Forum about whether AI will make up for Boomer retirements and bring attrition rates back into balance. My honest answer: not as a replacement, but as a meaningful tool.
Think of AI not as something that replaces employees, but as a force multiplier — one that helps fewer staff do more work faster and more consistently. It can serve as an institutional memory system, trained on existing government records like policies, ordinances, resolutions, and staff reports, to create a searchable knowledge assistant that answers process questions and explains prior decisions. It can shorten onboarding by guiding new staff through accounting, HR, budgeting, and permitting processes. It can reduce workload by automating low-risk, repetitive tasks: drafting routine reports and memos, summarizing meeting minutes, answering internal HR and payroll FAQs. Our own firm uses an internal HR chatbot — instead of searching through a manual, I can get an answer in seconds.
According to ICMA and NACO, most local governments aren’t starting with advanced AI — they’re beginning with internal productivity use cases. The biggest value comes from knowledge management and staff support, not public-facing automation. AI adoption in local governments is still early, but it is accelerating, driven in large part by the same workforce shortages and retirements we’ve been discussing.
The main caveat I’d emphasize: be careful about what data you put into these tools. Avoid inputting non-public data into general AI platforms.
Closing Thoughts
Fully embrace software implementations once the decision is made — and make sure the software works for all the departments and component units that need it. Think intentionally about culture as a retention tool. Contingency plans matter, not because things are likely to go wrong, but because preparation is what allows you to respond well when they do. Consider CPE for your entire finance team, not just select individuals. Succession planning with overlap is the gold standard, even when it’s difficult to execute. Delegation and releasing control aren’t signs of weakness — they are the foundation of a resilient organization.
And finally: give yourself grace. If you’re going through a genuinely difficult period, it’s easy to turn that difficulty into self-criticism. Sometimes the circumstances are just hard. Acknowledge it, figure out whether you need internal or external help, and take that step. Beating yourself up doesn’t move the work forward. Acting does.