Commissioners receive long awaited update on the 2022 audit

WADESBORO — Anson County’s long awaited budget results were shared by Mr. Alan Thompson of the Thompson, Price, Scott, Adams & Company P.A. accounting firm at the commissioner meeting held on February 6.

“The main thing you hire us to do as an independent audit firm is issue an opinion on the financial statements as a whole,” reminded Thompson. “We issued an unmodified report, which is a good report, there are some things I do need to walk through with you. Significant audit findings are qualitative aspects of the accounting practice under accounting policies, accounting estimates, and disclosures in the financial statements… we were good with all of those. No difficulties encountered in performing the audit, there were no uncorrected misstatements left when we finished.”

One area where Thompson cautioned commissioners is the speed in which the audit report is completed. “Some of the journal entries need to be made on a regular basis, not just at year’s end,” he reminded.

“The budget for the airport capitol project had not been properly modified. Various prior period adjustments still have to be made. The data collection form needs to be filed with audit clearing house, and there were some Medicaid findings although the Medicaid findings were not cost related. There were technical issues (like) appreciation schedules have to be updated throughout the year, there were several projects funds that had not been finished for the year and the appropriated budget amendments had not been approved. Various other programs were tested at the other department, several instances of insufficient documentation through these programs, and realize we are dealing with June 30, 2022, hoping to jump on June 30, 2023,” updated Thompson.

Thompson’s firm laid out the previous four years of budgets, going back to 2018, in order to simplify the process of determining qualitative strength and growth. “I don’t say these are all the numbers in the key audit report, but these are some of the numbers in the audit report, and the purpose of presenting it this way is that you can see some of these numbers. Then we can put the four prior year’s audit reports beside it and you can get a feel for the context of the fund balance or other numbers we are looking at. Any trends it might be showing with all four years side by side,” suggested the accountant.

According to Thompson, Anson County’s general fund balance in 2018 was $18,000,944 compared to the current number, $28,000,263. The unavailable fund balance totals $3.8 million compared to the restricted fund balance of $11,038,000.00. The numbers for the total general fund expenditures, including transfers, comes out at $32 million.

“The fund balance available as a percentage is at 76.2%. If you go back (2018) that number is 56.6% so it is a very positive trend on the overall fund balance and strength,” encouraged Thompson.

The unassigned fund balance is at $14.1 million, or 44.2%. The water fund had a profit of $89,000.00, and the wastewater fund had a loss of $1,000, 593. Total fixed assets in water sewer, and wastewater funds equaled $64 million, culminating in depreciation at $42 million and cash at $12 million. Cash in the general fund is $25.5 million. According to the audit, the water fund has $7.3 million in cash and wastewater $4,000,788.00.

Thompson reminded commissioners that the balance of the general fund is $28,000,263, before saying, “Other [counties] are at $624,000, the water fund is $20,000,486, and wastewater is $11,000,753.00. On both the water fund and wastewater fund you are looking for cash flow there because you are providing a service, not necessarily how high the net position is. Because you got a lot of fixed assets, you don’t intend to sell those, what you are really looking for is that you are providing and have cash flow. You want to provide the service at a reasonable cost, but you got to cover your costs,” he cautioned.

Much discussion has taken place at board meetings of late regarding collections, and Thompson took the opportunity to break the numbers down in black and white for Anson County citizens.

“Debt collection has a tax collection percentage of 94.12% and total debt is $2,881,000.00,” Thompson detailed. “Going back to 2018, the number is $5, 512,000.000. I know you are in the process of trying to get this ship turned. I think I used a battleship analogy when I was here before. You can see where your fund balance is gone up in the general fund, your cash balance has gone up, and then your debt balance continues to decline. All those are positive numbers. You need to know the ship on the accounting side is taking awhile to get turned, but all the numbers are positive, so that is really a good sign overall for the county.”

A breakdown of the general fund reveals revenue of $33.4 million, with total general fund expenditures at $31, 000,659. Analysis of the available fund balance went from $56.6% up to $76.2%.

Thompson shares that these figures are above the group weighted average, and that the general fund is positive for all five years that were shown.

One of the challenges Thompson feels that the county has from a financial standpoint is trying to get the collections average higher, though he points out having a low collection rate is common for rural counties and is an issue that will continuously need improvement moving forward. The collection rate is integral to the budget overall due to its large impact when determining the budget for the county.

“We do need to get the audit reports in faster, and there was a net income loss there that you need to address,” Thompson continued. “There is a budget violation, there were some statuary violations because of epic response there and you are on the unit assistance list, so we want to get off that list. Then you will not have as heavy a monitoring. The thing I would love for you to take away from this is if you get an unmodified report, which is a big deal, the finances will continue to trend in a very positive direction. We are getting closer to getting caught up and hopefully that can happen by June 30. I would love to be back on target with June 30, 2023 behind us and (start with) June 30, 2024 moving in the right direction. That would be what our goal would be and try to make it so that we go into the brand new year caught up and ready to move forward with life,” said Thompson, concluding his update to the board.

For his part, Commissioner JD Bricken wished to share an update of his own with the accountant, detailing some of the recent moves made by commissioners in their ongoing attempts to right the county’s proverbial ship.

“I would just like to thank you for the report and share a couple notes going along with what you are recommending,” began Bricken.” We just had a comprehensive peer review of our tax administration and they made a recommendation that we hire two more employees to help with that. Ultimately, the collection rate being in the 93-94% category, we are looking to bring that up to the state average. Secondly, we also have taken the state recommendations for the rate increase schedule for the water department into consideration into our last budget. We are listening and trying to learn what we can do, those two items that you brought up we are very aware of and we are making some effort to try to make improvements.”