BY MARK J. CRAWFORD
Telegraph Editor
Ron Whitesides of Purvis Gray CPAs delivered what turned out to be his final audit presentation to the Bradford County Commission July 21.
Whitesides said auditors gave the county a clean opinion regarding fiduciary activities.
One constitutional officer’s audit — the sheriff’s — found a repeat deficiency over internal control because auditors had to make significant year-end adjustments to finish closing out the fiscal year.
Auditors also noted a compliance issue because the county overspent its combined (board and constitutional officers) general fund budgets by approximately $100,000.
“Most of this is derived from the sheriff’s office, but it’s not as simple as just overspending the budget. A lot of it has to do with just doing budget amendments,” Whitesides said.
Revenues from grants, inmate housing or other sources need to be incorporated into the sheriff’s budget, either when the budget is approved or with budget amendments throughout or at the end of the year, Whitesides explained. Local governments have 60 days after the end of the fiscal year on Sept. 30 to finalize those budget amendments.
Out-of-county inmate housing, for example, results in revenue as well as expenditures for housing those inmates. Excess revenue is turned over to the county commission. This needs to be reflected in the budget before the audit begins.
“So, I think all of this can be addressed, but there is going to require more assistance or activity or even coordination with the clerk’s office to some extent to make sure all those things get done within 60 days of yearend,” he said.
In 2009, the Sheriff Gordon Smith and the commission agreed excess inmate housing revenue would be set aside for jail repairs and catastrophic inmate medical expenses. Prior to that, this funding was being split evenly between the board and sheriff’s office.
In 2017, Smith asked for half of the money back for discretionary spending. To supposedly simplify accounting, former Commissioner Frank Durrance suggested in 2020 that Smith keep all the inmate housing revenue generated through the year, turning over what was left to the commission at the end of the fiscal year.
Sheriff Smith referred to the current shuffling of money back and forth as a “nightmare,” however, and not something that can be accomplished all at the end of the fiscal year. Estimating the amount of housing revenue that will be generated and how it will be spent should be included in his budget at the beginning of the year, he said.
For example, if the revenues from housing are estimated at $1.2 million for the year, the county can include that as a source of funding when approving the sheriff’s budget, knowing that any unbudgeted or unspent revenue would be turned over in a single transaction at the end of the year.
Smith said this will also prevent the perception that the sheriff’s office is overspending its budget, when they are really waiting to be paid by the U.S. Marshals so they can turn the revenue over to the county and wait again for the county to release a portion of it back to the sheriff’s office.
Millions spent in aid
Single audits of federal and state grant funding in excess of $750,000 were required for 2021. Bradford spent $2.9 million in federal awards, most of which went to public safety payroll, and another $1.9 million in state grants for the library and road projects. No issues with control or compliance issues were noted.
Deficit spending
The county’s total revenues were up $1.1 million, most of that from increased tax revenue. Whitesides said the increase was nearly evenly split between more property tax revenue (due to the 7% increase in property values) and sales tax revenue, which bounced back in 2021.
Expenditures exceeded revenues again in 2021, increasing another $1.1 million overall. At $1.89 million over 2020, Whitesides said the increase in the economic environment line item reflected Covid assistance the county paid to the school board, businesses and individuals. These were not the costs submitted under the CARES program; again, that funding went to public safety payroll.
“So, for 2021, the general funds (combined) operated a $1.1 million deficit. So, expenses in excess of revenues as compared to 2020. … So obviously, that’s not a positive trend. But again, I’ll point out as far as the general fund goes, a lot of that’s been driven by a one-time cost related to the pandemic,” he said.
While there was a decrease in the unassigned fund balance from 2020 to 2021. Still, at more than $5.5 million, the unassigned balance represents 33% of the county’s total general fund expenditures. That is three to four months of spending. The Government Finance Officers Association recommends having at least two months’ spending in reserve.
Whitesides cautioned, however, that the guideline says nothing about the condition of the county’s infrastructure or its public service levels. Having worked with the county, he said he knows money is tight and the fund balance number doesn’t mean the county is “flush with cash” as it works to balance revenues and expenditures.
County will seek new auditor
Whitesides announced Purvis Gray’s contract with the county is at an end and they will not be submitting a proposal to continue covering Bradford. With the retirement of the audit manager who worked with the county for years, it has been difficult to find someone within Purvis Gray who was the right fit. Whitesides said it’s us, not you.
He did say the company could participate in helping train or work with the sheriff’s staff on closing its books. Since Purvis Gray wouldn’t be running the audit, they wouldn’t run the risk of auditing their own work.
