That’s a good thing in accounting speak.
“It’s a good audit,” Larry Bailey said Friday. “We’ve got a very good report.”
He’s the county’s top finance officer.
“The financial condition of the county, overall, was very consistent with the previous year,” Bailey said. “We declined in some places, but in other places we improved a little bit. We usually have some minor findings, but we don’t have any this year. That’s very fortunate. But we’ve got a good group of officials and department heads here that made that come about.”
The only blemish pointed out by the audit, which as released last month, was a lack of financial information from the Sullivan County Emergency Communications District. That’s the county’s 911 system.
Because of that, the state’s Comptroller of the Treasury office listed its audit of the county’s finances and accounting practices for fiscal year 2007 as “qualified.”
According to a section of the audit prepared by Bailey’s office, as “management’s discussion and analysis” of the county’s financial activities for fiscal year 2007, some “financial highlights included:
•“The assets of Sullivan County primary government exceeded the liabilities at the close of the ... fiscal year by $43.2 million (net assets). Of this amount, $36.9 million is invested in capital assets, net of related debt.”
•“The government’s total net assets increased $14 million. Most of this increase is attributable to the recording of infrastructure assets (roads and bridges) to the financial statements for the first time.”
•“At the end of the fiscal year, unreserved fund balance for the general fund was $9.6 million, or $26.5 percent of total general fund expenditures.”
•“As of the close of the fiscal year, Sullivan County’s governmental funds reported combined ending fund balances of $28.4 million, an increase of $2.3 million in comparison to the prior year. Most of this total amount, $25.4 million, is available for spending at the government’s discretion (unreserved fund balance). However, $8.2 of the unreserved balance represents amounts accumulated for specific capital projects approved by the county commission.”
Elsewhere in the same section of the audit, Bailey’s office again made note of the $28.4 million total fund balances, and that most of the amount — $25.4 million — “constitutes unreserved fund balance, which is available for spending at the government’s discretion. The remainder of the fund balance is reserved to indicate that it is not available for new spending because it has already been committed 1) to liquidate contracts and purchase orders of the prior period ($1.8 million) and 2) for a variety of other restricted purposes that are listed on the governmental fund balance sheet ($1.3 million).”
Bailey said the audit’s discussion of surpluses doesn’t equal a windfall of funding for new projects is just waiting to be spent.
“I don’t like those figures,” Bailey said. “I know that there’s so many factors that go into them, to get down to the nitty-gritty — they don’t. In other words, you get into so many other issues that are mixed into those figures, that to just tell you the net operations of the county, it doesn’t do that.”
The $28.4 million figure, Bailey said, is a total of all the different funds for the different branches of county government — schools, highway department, solid waste, and others.
A similar figure in last year’s audit had some county commissioners thinking the county had $19 million that could be spent on anything.
“No, we had $19 million scattered out among several funds, such as debt service. That restricts what it can be spent on. We can’t take debt service funds, for example, and spend them on salaries or raises. We can’t take highway funds and spend them for school purposes or for solid waste purposes. They’re there for a specific purpose and they must be spent for that purpose.”
The fund with the most flexibility is the general fund, Bailey said.
“We’ve really got roughly $10 million (in the general fund balance),” Bailey said. “For the general fund itself, we try to keep it at at least $10 million for cash flow purposes. The fiscal year begins July 1. The biggest portion of funding for the general fund is from property taxes. We don’t start collecting those until October — and most aren’t paid until February. We have to have money for cash flow. You have to operate from July until after October when taxes start coming in. That’s why you need a good fund balance there. Plus you need it there as insurance for potential economic downturns and shortfalls in revenues, and any emergency expenditures you might have come up during the year.”