Banking program makes for county ‘peace of mind,’ smooth audit process

Key Takeaways

Suffolk County, N.Y.’s Bank Account Collateralization program increases financial transparency and ensures that taxpayer dollars are safe, even in the event of a bank failure, through three+one technology and cross-county collaboration. 

Five bank failures in 2023 led to the largest banking sector crisis in U.S. history by total asset value, representing over $540 billion in combined assets. While the Suffolk County Comptroller’s Office was not directly impacted by the failures, it prompted the county to “take a step back and rethink how it was managing depository relationships,” said County Comptroller John M. Kennedy, Jr. 

“It was an important reminder that strong oversight and visibility are essential, regardless of the economic environment,” he said.

Three+one, which had already been an “integral” piece of the county’s depository and cash management operations for years, helped coordinate the technological resources and banking relationships needed to bring together the county, its banks and custodians into a more streamlined collateral reporting process, according to Kennedy. 

“When I saw there was an opportunity to strengthen our collateral monitoring process and improve transparency without creating additional strain on staff, I felt it was something we needed to pursue,” Kennedy said. “It’s about making sure the county is doing everything possible to protect public funds and maintain confidence in our financial systems.”

There are currently seven banks which hold the majority of Suffolk County’s deposits, all of which are being tracked, and there are additional financial institutions and custodians involved behind the scenes, Kennedy noted.   

“A significant amount of coordination was involved because many of our banks utilize third-party custodians to hold collateral,” Kennedy said. “While that separation of responsibilities is an important safeguard, it also adds operational complexity.”

After launching in the beginning of 2024, The Bank Account Collateralization program continued developing across different departments as they were onboarded, allowing the comptroller to capture their bank data in a reporting tool. By the last quarter of 2025, the program had been fully implemented, and the Comptroller’s Office produces collateral reports bimonthly, according to Kennedy.

“This is an ongoing process because banking relationships and account structures naturally evolve over time,” Kennedy said. “But we’re very proud of the foundation that has been established and the visibility it now provides our office.”

As staffing changes have occurred within both the county’s cash management and audit functions, having a more structured and transparent process in place has allowed the Comptroller’s Office to coordinate more effectively with auditors, banks, custodians and its internal team while maintaining continuity and confidence in the process, according to Kennedy. 

“Our annual audit process is probably when we appreciate the value of this program the most,” Kennedy said. “Having timely collateral reporting and support from three+one has made it much easier to respond to questions and conduct deeper reviews when necessary.”

The collateralization program has saved the Comptroller’s Office significant time, particularly during audit season, by reducing the amount of manual coordination and research required, according to Kennedy. 

“Beyond the operational improvements, the greatest benefit is the peace of mind that comes from knowing we have stronger visibility into the protection of county funds,” Kennedy said. “That level of oversight and accountability is extremely valuable to our office and to taxpayers.”

For other counties looking to adopt a similar model, it’s important to involve information technology staff and trusted third-party advisors early on to identify opportunities in improving automation, reporting and data sharing, Kennedy said. Maintaining open communication with banking partners, who may already have tools or reporting capabilities available that can help modernize your process, is also key, he noted. 

“Ask questions and involve the right people early in the process,” Kennedy said. “Speak with long-tenured staff who understand how your current program evolved over time, because that institutional knowledge is invaluable.”