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Draft county audit report shows positive signs

The presentation of the 2009 Archuleta County audit report Wednesday morning indicated the county continues to rebound from its 2007 financial meltdown, showing positive governmental fund balances.

The report was presented by Karla Wilshaw and Kim Temple, of Wall, Smith, Bateman and Associates, Inc.

The representatives presented a “draft” of the audit report to the BoCC, due to the fact that the Archuleta County Housing Authority financial statement had not been completed.

The report indicates the county’s assets of $52,854,350 exceeded its liabilities of $16,651,337 in 2009 by $36 million. The county’s total net assets increased by approximately $679,452.

At the end of 2009, the combined fund balance of all county governmental funds was $6.7 million, an increase of $2.6 million over 2008, due to the elimination of interfund “due froms” and loans, the report states.

The county was in noncompliance with Colorado State Statues going back to 2009 because of negative fund balances in four funds caused by the overspending that had caused the county’s 2007 financial meltdown.

According to the report, the county’s long-term liability increased $3.4 million. It is noted that the county entered into a capital lease for $5 million in 2009 to pay off other lease agreements, for road work, and to purchase equipment.

Also reflected in the report is the fact the county eliminated a number of special revenue funds, without specific revenue, in order to comply with the Government Accounting Standards Board statement 54.

The report indicates that the elimination of the funds “provides transparency in the County’s operations.”

Those funds that were eliminated include the Tourism Fund, Fair Board Fund, Community Services Fund, Jail Commissary Fund, Sidewalk Building Fund, Emergency Reserve Fund, Airport Fund, the Road Capital Improvement Fund and the 1A Fund, taking the number of special revenue funds from 14 to five.

Specifically, for the General Fund, the ending 2009 fund balance totaled $2,231,710, an increase of $686,757 from 2008. The year-end balance is 12.3 percent of the General Fund expenditures.

Increasing fund balance levels and obtaining fiscal stability is a primary goal for the county in coming years, in order to support operations for the first three months of the year, the report states. The first three months of the year, property tax revenues are not yet avaiable to adequately cover operating expenses.

In the presentation Wednesday morning, Wilshaw noted that the auditors’ opinion was an unqualified opinion — the type of opinion strived for and the kind that has eluded the county in recent years.

The opinion, with which Commissioner Bob Moomaw was quick to express his pleasure, indicates that the year-end information and financial position are in conformity with accounting principles generally accepted within the United States.

Many of the negative findings in the audit report revolved around the Temporary Assistance for Needy Families (TANF) fund within the Department of Human Service and the expenditure of revenues.

The report identified $23,201 of TANF expenses as questionable costs, which the county may have to repay.

Wilshaw noted that the TANF funding, in her experience, was a “problem child” statewide.

Recommendations on how to alleviate the problem centered on additional training of DHS staff and implementation of additional internal controls.

Internal controls were examined in a finding that included the inadequate reconciliation of cash in the Treasurer’s Office during 2009. The errors have been corrected in 2010 and a number of additional internal controls have been planned.

Commissioner John Ranson expressed the desire for quarterly meetings in order to update where the county is in terms of completing corrective measures.

County Finance Director Diane Sorenson noted that the corrective action plan had been laid out and was incorporated into the county’s financial workplan.

Moomaw revisited an idea that was brought about directly after the financial meltdown — meeting with the audit firm quarterly — which Wilshaw said was not necessary at this point, due to the county’s positive process.

The meeting ended with a number of thanks to the auditing firm, Moomaw, Ranson, the financial taskforce and the current staff, for their work in helping the county to rebound financially.