Monday, June 24, 2024

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Firm announces “clean audit” of Alamance County’s finances

Alamance County’s finances have received a clean bill of health from the independent auditing firm that has been reviewing the county government’s books for the better part of a decade.

Elsa Watts of Martin, Starnes & Associates formally announced this glowing assessment on Tuesday when she appeared before the county’s board of commissioners to share the results of her firm’s latest deep dive into the county’s financial records.

During a regularly-scheduled meeting that evening, Watts told the commissioners that the county had received “a clean audit” with only a few minor lapses or discrepancies that were worth noting in her report.

Watts said that her audit revealed that the county’s general fund took in a grand total of $173,893,913 during the fiscal year that ended on June 30, 2020. During this same 12-month period, the general fund paid out a total of $159,949,265, leaving the county with a surplus of $13,944,648 at the end of the year.

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Watts contrasted these figures with those from the fiscal year that ended in June of 2019. During the earlier cycle, the general fund spent $147,160,197 of the $153,926,683 that it took in and ultimately ended the year some $6,766,486 to the good.

Watts also informed the commissioners that the county managed to increase the funds that it squirreled away into its savings during its most recent financial cycle. According to her report, the general fund’s cumulative savings, or fund balance, finished the year at $56,909,836 – a net gain of $5,011,733 over the previous year-end balance. Meanwhile, the increase in funds that were actually available for use amounted to $5,225,669.

According to Watts, the general fund’s savings included about $46.8 million in cash that wasn’t under any sort of state-level restriction. This so-called “available fund balance,” which is monitored closely by state-level officials, amounted to about 29.3 percent of the general fund’s outlays during the past fiscal year.

The county, for its part, has tended to home in on a portion of these “available” reserves that excludes any funds which have already been earmarked for particular uses. This so-called “unassigned fund balance” finished the year at about $24,587,727, or 15.37 percent of the general fund’s budget, according to the auditor’s report to the commissioners. Although this figure represents an increase over the previous year’s percentage of 12.49, it falls short of the 20 percent that the county’s financial policy currently recommends the general fund should have in available, unassigned funds.

Watts went on to inform the commissioners that property taxes accounted for nearly $97.9 million of the general fund’s revenues during the past fiscal year – as compared to the $84.5 million they generated in the previous year. She attributed much of the increase to a tax hike that the commissioners approved in anticipation of $189.6 million in bonds that it is now preparing to issue on behalf of the Alamance-Burlington school system and Alamance Community College.

Watts told the commissioners that the county’s sales tax receipts also rose slightly from $31.5 million to $32.2 million during the last fiscal year. The county also saw a significant increase in “restricted intergovernmental revenues,” which went up from $18.8 million to $22.2 million.

On the other side of the ledger, the largest increase in expenditures occurred in the area of public safety, where outlays rose from about $36.4 to $40.8 million over the past fiscal year. Watts said that the jump in public safety spending was “due to salary and benefit increases, partly due to COVID, and other increases, which were operational.” Outlays on human services also saw a modest bump from $30.7 million to $31.1 million, while educational expenditures increased from $47.2 million to $50.1 million.

Once Watts had briefed the county’s governing board, Alamance County’s manager Bryan Hagood assured its members that the auditor’s findings have put the county in what amounts to the catbird seat as it prepares to issue the aforementioned bonds.

“It is very important that you have a good audit going into a large debt issuance,” he told the commissioners. “This was a good audit. We have a strong fund balance. That was very important, and we were working on building that up for this debt issuance.”

Hagood also informed the commissioners that the county has managed to stabilize a large employee insurance fund, which had previously been hemorrhaging money year after year.

Hagood went on to report on the county’s compliance with its own financial policies. He told the commissioners that the county has faithfully followed all of its debt-related policies as well as most of its other stated objectives.

One of the few policies that Hagood admitted the county has not, in fact, met is its goal to maintain an unassigned fund balance equal to at least 20 percent of the general fund’s budget. The county has nevertheless increased the value of its unassigned fund balance from 12.49 to 15.37 percent of the general fund’s outlays.

Hagood pointed out that the $24,587,727 which is currently in the unassigned fund balance is well over the state’s minimum threshold of 8 percent. He nevertheless warned the commissioners that these funds could quickly evaporate in the event of a crisis.

“These funds sound like a lot of money,” he added, “[until] you consider that we would burn through that in two months.”

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