A drop in Alamance County’s readily usable savings has put a bit of a damper on an otherwise upbeat report from the independent auditor that reviews the county government’s books.
Elsa Swenson with the Hickory-based firm of Martin Starnes & Associates was ultimately enthusiastic about the county’s financial prospects when she appeared before the board of commissioners on Monday to present the results of her audit for the fiscal year that ended on June 30, 2024.
Swenson told the commissioners that, during this cycle, the county’s general fund took in a total of $209,331,968 – an increase of roughly $4.3 million from the previous year. Swenson added that the same period saw an even greater rise of about $9.6 million in the general fund’s outlays. Even so, the fund’s year-end expenditures of $206,508,068 were still $2.8 million or so less than its revenues.
“So, revenues continue to exceed expenditures,” the county’s auditor went on to observe.
Swenson attributed much of this past year’s increase in revenues to a $5 million gain in the county’s property tax proceeds. This spike has been partially offset by a $1.6 million reduction in the county’s sales tax receipts as well as drop of $3.9 million in state and federal grants.
In either case, the county’s revenues proved more than adequate to cover increased expenditures in areas like public education, human services, and public safety. Swenson noted that, in the past fiscal year, the county’s overall spending on education rose from $55.5 million to $57.7 million. In the meantime, it’s outlays on human services went up from about $36.2 million to $38.8 million, while its public safety expenditures shot up from $50.2 million to $54.3 million. Swenson attributed higher personnel costs to the increases in both public safety and human services.
Swenson said that this past year’s surplus ultimately contributed to a $5.5 million increase in the general funds accumulated reserves, which finished the fiscal year at $96,939,918. This sum includes some $16 million that’s restricted by state statute, leaving another $80.8 million, or about 39.1 percent of the general fund’s outlays, that’s theoretically available to the county for use.
Swenson added that, after factoring out cash which has been set aside for specific purposes, the county has $41,023,644 in “unassigned” savings – a decline of more than $5.7 million from the previous year. As a fraction of the general fund’s annual outlays, this portion of the county’s reserves has fallen from 23.75 to 19.87 percent in the past fiscal year.
Swenson went on to point to an issue that had emerged with the county’s procurement cards – an apparent reference to thousands of dollars in unauthorized charges that led to the arrest of a former county employee and two members of her immediate family. Swenson added that her audit had faulted the county’s “segregation of duties” for enabling these illicit transactions.
“And we have now taken action to correct those matters,” added Susan Evans, the county’s finance director, in order to reassure the commissioners about the integrity of the county’s internal controls.
Some members of the county’s governing board were also a bit troubled by the auditor’s report on the county’s unassigned savings. John Paisley, Jr., the chairman of Alamance County’s commissioners, observed that, at 19.87 percent of the general fund’s outlays, this portion of the county’s reserves is now under the board’s self-imposed target of 20 percent. Evans insisted that she sees no cause for alarm over this drop below the 20-percent mark.
“We are slightly below that,” she added, “and about $300,000 will put us back at 20 percent. “So, it’s not something I’m overly concerned about.”
Steve Carter, the vice chairman of Alamance County’s commissioners, was nevertheless convinced that even a retrenchment to 20 percent may be inadequate to ensure the county’s long-term stability.
“A reasonable target for the fund balance would be 25 percent of the operating expenses,” he went on to declare.
Meanwhile, Paisley admonished his fellow commissioners to keep a closer watch on the county’s expenditures – with a particular focus on public education, which Swenson had ranked over other areas of spending with its 28 percent share of the general fund’s outlays.
“So, your educators are getting by far more than anyone else from our budget,” the board’s chairman went on to assert, “and we just need to be aware of where we are spending our money.”
