BY TRACY LEE TATE
Times Editor
LAKE BUTLER — At its regular July meeting the Union County commission received the state mandated audit for the 2020-21 fiscal year with good reports in all areas.
Union County Clerk of Court and Comptroller Kellie Hendricks Rhoades, CPA, explained in an interview that an audit is not what most people think.
“The purpose of an audit is to look at the county’s internal controls to ensure they follow both state statute and rules set by the county commission and to ensure they are adequate and have been followed,” Rhoades said. “It is not the auditor’s job to look at every little thing and say it is perfect. They look at the processes of how money is handled to make sure there are no “holes” that could allow fraud or theft and that the processes (checks and balances) used by the county are adequate to prevent these problems.”
The audit was done by the James Moore accounting firm, with the presentation to the commission done by Zach Chalifour, CPA. Chalifour noted several points in his presentation.
First noted was the award won by the most recent Annual Comprehensive Financial Report (ACFR) compiled by Rhoades and her staff. Chalifour noted that the report had won a Certificate of Achievement for Excellence in Financial Reporting, the second time the county has won this award. He also noted that this report was a great asset to the auditors in their work on the current audit.
Chalifour said the audit had no findings and an unqualified opinion – the highest judgement the auditors can give on the county financial management practices. No material weaknesses in internal control were found and there was also no material noncompliance. Basically, the county was conducting financial business in an appropriate manner with no weaknesses detected in its financial practices.
Chalifour focused on the county’s general fund in his report to the commission. He reviewed the general fund records for the year of the audit compared to the two prior fiscal years. At the end of the 2018-19 fiscal year the fund was down, in most part due to the bat invasion of the courthouse and legal expenses. During this year the county had significant debt and prepaid expenses, with the general fund total being $2,067,874. The following fiscal year, 2019-2020, the fund balance increased to $2,523,714, still reflecting the effects of the pandemic, but also the fact that the county was almost debt free the only debt being from long-term leases. For the fiscal year covered by the audit, the fund balance was up even more, to $2,641,079, with most of this amount earmarked for unassigned spending (money that can be moved to different areas when unplanned expenses occur). The 2020-21 balance was the second highest in the past ten years – an indication of the financial health of the county finances.
The Government Finance Officers Association recommends that a governmental entity have on hand at least two months (16.7% of the annual operating costs) of operating expenses on hand at any time. In Florida the recommendation of the county auditors is a minimum of three months because there is a history, and therefore a future possibility, of income interruption and sudden increased expense, from natural disasters, mostly in the form of hurricanes. Such a “reserve” is in place to insure that there is no lapse in county services and function, including both the provision of these services uninterrupted and the payment of addition salaries necessary to make sure all issues are dealt with.
According to the audit, Union County has about four months of operating expenses on hand to deal with any contingency or natural disaster. Rhoades said she likes to see the fund with three to four months funds available, just in case there are problems that cannot be quickly resolved. This year the general fund balance is higher than the county’s expenditures for the third year in a row, recovering from a peak in expenditures during the 2018-19 fiscal year, when expenditures increased by about 10 percent over the fund balance.
What all this means is that the county is living within its means, with no individual deficit in fund balances and no exceptions noted in the way restricted monies (such as grant funds and special areas where money is earmarked for a specific use) are being spent. The county has no substantial debt as well.
“Government is not a profit-seeking business,” Rhoades said. “We are not in the business of making money and are always very aware that we are dealing with taxpayer funds. Reserves are necessary to ensure the county can operate efficiently in any situation and provide all of the services that are routine and necessary, as well as those made necessary by the conditions we operate under, for the safety and welfare of our residents.”
