Image Link  08/08/2016

Elbert County Financial Audit 2015...Part 2

Improved Performance OR Creative Cash Positioning ?

In Part One of this two part commentary of the 2015 Elbert County Financial Statement, this writer talked about “the elephant in the room”...decreasing “net position” of the county’s assets, year-over-year-over-year-over-year.

In this portion, we will look at the improvement of the county’s cash position and offer some alternative viewpoints to those presented by our county management team.

Comparing cash position at the end of 2014 to the cash position at the end of 2015, the financial statement does show larger balances in many overall improvement of approximately $1,000,000.

On closer examination, perhaps there are some reasons for the increases that are not all due to better controls and management techniques.

The Sales and Use Tax Fund, dedicated to capital improvements for road and bridge:

Would you be surprised if you found out that not all revenues collected in a given year from the 1% sales tax were spent in that year? Apparently, funds are held in this account ostensibly to do larger projects. A side benefit to this technique is that cash positions improve year-over-year. The fund had revenues in excess of expenses of approximately $445,000 in 2015...something to think about.

The Conservation Trust Fund:

This is the money the county gets as their portion of the Lottery funds...GOCO fund. These funds are earmarked for capital improvements and cultural expenses. We received less revenue during the year than was budgeted, yet chose to keep a standing balance in excess of $350,000 in the fund...again, something to ponder.

The Wells Fargo Bond:

Each year since 1999, when the county refinanced a previous bond used in connection with the justice center AND to borrow additional funds to pay expenses, the county has had to hold $500,000 in reserve as part of the terms of the note. While this did not change in 2015, early in 2016, this note was refinanced at a better interest rate, which also freed up the required reserves to be used for general expenses. This will be another point to consider when looking at the 2016 financial statement in July, 2017.

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The budgeting and reporting process employed by the finance department continues to be murky at best. The annual financial statement is the only document available that can be used as a measuring stick to compare projected performance with actual performance. It is hard to imagine how anyone at the county can make any meaningful decisions on finances when a detailed report is only available once per year, and which occurs eight months after the current year’s budget has been approved and sent to the state.

A wise manager once said, “you can’t manage what you can’t measure.”

Perhaps that explains how a $3,000,000 deficit budget for 2016 was passed. The impression is that the budgeting “process” was just a shot-in-the-dark.

It is time to stop hiring applicants whose resumes DO NOT fit the job description.

It is time to insist on MONTHLY financial statements with a variance report which identifies the difference between budgeted amounts and actual performance.

It is time for an entirely different make-up of the BOCC. If we continue with “more of the same,” we will watch as the county is run aground.

In November, vote for those who have been involved, not newly christened “leaders” with little to no knowledge of previous events and challenges facing Elbert County.

--Jim Duvall