County’s audit shows dip in unassigned fund balance
SALISBURY — Money in a fund that’s partially used as a savings account for county government declined by more than $2 million from the 2018 to the 2019 fiscal year, according to an annual audit received by commissioners this week.
The audit conducted by Martin Starnes and Associates found that Rowan County’s unassigned fund balance — on which there are no internal or external constraints for spending — declined by $2.28 million. That means less money that could be used for any purpose in the event of an economic downturn.
Senior staff say it’s not a sign that county government is in a bad financial state and Commissioners Chairman Greg Edds called it evidence that the county is making investments in infrastructure and public services.
“I would say that unassigned fund balance is going to fluctuate from year to year. It would be great if it increased year after year, but things fluctuate,” said County Manager Aaron Church. “As long as it’s within a certain range, it’s not anything to be concerned about.”
As of June 30, the county’s unassigned fund balance was $16 million. That’s compared to $18.28 million one year earlier.
The cause of the decrease, Church and Assistant County Manager Leslie Heidrick said, involves $400,000 being used to balance the budget and state requirements about accounting. They noted other savings accounts for which there are specific designations, including education and economic development, increased.
“I feel as the finance director that an unassigned fund balance of $16 million is very fiscally sound and that we are in a good fiscal position,” Heidrick said.
Edds said he was surprised to see the $2 million decrease, but echoed staff comments.
“It would be bad news if we didn’t know why it happened, but we know why,” he said.
He said the current group of county commissioners have chosen to invest heavily in education, public safety and economic development, mentioning a new library and EMS station being built in Cleveland as well as pay raises for the sheriff’s office.
He noted that county tax revenues are on the rise and he believed the unassigned fund balance decrease would not become a trend.
At the end of October, the latest month available, the county had collected $63.97 million in revenue. At the same mark in 2019, the same number was $57.72 million. It was $57.67 million in 2018. Though, revaluation produced higher property values and county commissioners did not reduce property taxes to a revenue-neutral rate when passing the 2019-2020 budget.
The unassigned fund balance contrasts with the county’s total fund balance, which includes non-cash assets and increased by a small $16,494 from 2018 to this year. The audit also did not produce any negative findings about the county’s finances during the 2018-2019 fiscal year.
Other notes from the 2018-2019 audit include:
• The county’s total revenues in the 2018-2019 fiscal year were $144.43 million, as compared to $141.77 million one year earlier. Expenses were $143.79 million, as compared to $141.43 million one year earlier.
• At 32%, education comprised the largest single portion of expenditures from county government’s general fund. Public safety was next, at 22%. It was followed by human services at 18%.
• Spending on education increased from $44.09 million in the 2017-2018 fiscal year to $45.81 million in the 2018-2019 fiscal year.
• Debt service payments decreased from $15.67 million per year in the 2017-2018 fiscal year to $15.28 million in the 2018-2019 fiscal year.