Image Link  07/28/2016

Elbert County Financial Audit 2015...Part One

“Paper Loss” OR “The Elephant in the Room?”

At the July 20, 2016 Board of County Commissioners’ (BOCC) Meeting, Eide-Bailey presented the audit; the 2015 Elbert County Financial Statement. This 79 page document has been posted on the official county website: for all to read.

This is the first of two articles with commentary about some specific, ongoing issues that the county management team has not addressed effectively for the past several audits. And this writer, for one, wants a better outcome than this team of managers can seem to produce.

The title of this first article comes from two statements made by two participants in the audit presentation/BOCC meeting.

Commissioner Rowland, referring to an operating loss of just over $3,000,000, stated that this is “only a paper loss, not a cash loss.” He also stated that there were misunderstandings of this issue shared by commentators in previous years (particularly in reference to the 2014 Financial Statement). His intention was to make sure he set the record straight...or so he said.

The auditor making the presentation, Kim Higgins, on the other hand, referred to this recurring loss (check the audits of the past 4 to 5 years) as “the elephant in the room.” She also stated that the county would have to deal with this continual depletion of marketable assets or soon we in Elbert County will not have ANY marketable assets left to even up our mismanagement of the annual budget.

Essentially, using commonly accepted accounting practices, the county is given an allowance (depreciation) for the gradual deterioration of our capital assets. This allowance is an expense against the revenue. It is not the same as payroll, or utilities where actual checks are written and cashed, reducing the county’s general this respect, Commissioner Rowland is correct.

However, prudent and competent management would reinvest a like or larger amount in our capital assets so that our “net position” does not decrease each year as has been the case in Elbert County year after year.

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Rather, we have reinvested approximately half of the depreciation amount each year, slowly reducing our marketable asset position to approximately $5 million this pace, we will be OUT of marketable assets in two years.


The auditor suggested several ways to increase revenue to stem this downward spiral.

  • Increase the mill levy on properties in the county through a ballot measure. This won’t be popular among the homeowners/voters of the county, but may be necessary if services and capital investment in assets is a priority of the majority of residents.
  • Attract more commercial entities to increase revenue. This has proven to be a very tough sell partly because we have not invested in improved infrastructure which might attract more business or commercial enterprises
  • Identify more services in the county that can generate additional fees. This will take some outside-the-box-thinking by our leaders and management team.

Not mentioned, but certainly a possible outcome as assets continue to decrease is across the board cuts in ALL departments to offset the decrease in net position, which represents approximately 12% of the entire county budget.

There will be more to come on the "cash position" in Part Two.

Continuing the same policies but harboring expectations of a different outcome is a clinical definition of is past time to try a different direction.

--Jim Duvall