Audit report paints bright financial picture of county
By Jessie Burchette
Rowan County’s financial picture continues to grow brighter according to the latest audit report.
And despite dipping into the fund balance — or savings — to avoid a tax hike, the county is still in very good financial shape according to auditors.
Sam Leder of Potter & Co. recently presented copies of the comprehensive financial report to the Rowan County Board of Commissioners and gave them a brief overview.
Leder said this is the ninth year his firm has done the audit. “We seen a lot of change — all good change,” he said.
Among his recommendations to the county, auditors called for hiring an internal auditor and to strictly enforce the county’s purchase order policy.
“You have a wonderful (purchase order policy) — some departments have found ways to circumvent the policy,” said Cindy Spencer, also with Potter & Co.
Spencer said the policy requires a purchase order for anything in excess of $300. In the audit, they found departments that would do multiple purchases of items for $250, $260 or $280 to get around the policy.
“That policy has been fixed,” said Arnold Chamberlain, chairman of the Board of Commissioners.
Responding to a question, Finance Director Leslie Heidrick said memos went to all departments in September advising that if they don’t following the purchase order policy, they will be referred to County Manager Bill Cowan.
Commissioners also questioned the need for an internal auditor, a recommendation that has been made for several years.
Heidrick said members of her staff make spot checks on cash in the various departments, but don’t have the personnel to review policies in each department and make sure they are being carried out.
“Should we get an internal auditor?” Chamberlain asked.
“Yes,” Heidrick replied with no hesitation.
The audit shows the county’s undesignated fund balance dropped by $2 million in the past fiscal year, which ended June 30. The fund dropped from $21 million to $19 million.
The drop was, in part, due to the county’s designating monies for future projects, including nearly $2 million for a new jail pod.
The county’s total fund balance, which includes money that has been designated for future projects, totals $40 million.
Over the past couple of years, commissioners have opted to spend more of the fund balance, but revenues have exceeded spending, leaving additional surplus at the end of the year.
Heidrick said Wednesday that the current year is likely to change the trend — spending will exceed revenues.
In the current budget, commissioners have included nearly $8 million of the $19 million fund balance.
Heidrick added that even with the dip into the fund balance, the county “is still in very good shape.”
During the audit presentation last week, commissioner raised some issues.
At the request of Commissioner Jim Sides, auditors provided the county with copies of the audit for the Rowan/Kannapolis Alcoholic Beverage Commission. Potter & Company also do the audit for the ABC system.
Sides noted that the system made a $150,000 profit last year but opted not to share any of the money with the county or municipalities.
“It’s a $7 million operation and we don’t see any of the money,” Sides said, suggesting there needs to be a report.
Leder praised the county’s finance department for doing an excellent job. And he praised the staff for putting together the 180-page comprehensive audit.
“There are a lot of counties that can’t do this,” said Leder, referring to the report.
At the outset of the meeting, Leder looked around the room to see the overflow crowd.
“I got all excited, I thought they had come to hear the audit,” Leder joked.
A copy of the report is available for public inspection at the county manager’s office.
County finance facts from the 2006 audit
* As of June 30, the county owed $95.2 million from school bonds. Bonds plus interest total $126 million with the final payment in 2021.
* $2 million — remaining debt on Justice Center.
* $109 million — county’s total long-term debt as of June 30.
* With the issuing of more than $76 million in school bonds in 2004 and 2005, the county’s per capita debt grew from $329 per person in 2003 to $825 in 2005. It dropped to $794 in 2006 with the payoff of $5.3 million in school debt.
* $95 million — the amount of benefits coming to Rowan residents through federal programs, including Medicaid, Food Stamps and other Social Service programs; $40.6 million the amount of state dollars for similar programs.
* $9.8 billion — total value of all property.
* $61.5 million — total taxes collected.
* Undesignated fund balance grew from $7 million in 1997 to $21 million in 2005.
* Rowan County Power LLC off N.C. 801 continues to be the county’s largest taxpayer, with an assessed value of $334 million.