Audit: 'Declining financial condition' vexes Skamania
County may not be able to meet service levels, state says
Monday, September 24, 2012
Skamania County may not be able to pay to maintain its current service levels because of a "declining financial condition," the Washington State Auditor's office reported Monday.
During a financial audit, the auditor's office determined the county's general fund expenditures exceeded revenues in 2009, 2010 and 2011. By the end of 2011, the county had borrowed $1.15 million from restricted funds to cover general fund operations, the report said.
"The county prepared annual budgets for 2010 and 2011 based on revenue estimates," the report said. "When forecasted revenue was not received, the county did not take timely action to reduce expenditures."
The office said the county should:
• Make a comprehensive plan, including detailed financial benchmarks and guidelines to target cash-flow issues.
• Improve its general fund cash flow to decrease dependency on interfund loans.
• Closely monitor financial activities and ensure timely and accurate financial information is provided to commissioners to help with decision-making.
"The county is aware of the precarious financial condition and took significant steps at the end of 2011 and in the 2012 budget to meet this issue," the county said in its response.
The 2012 general fund budget was reduced by 30 percent. The county also took a $2.5 million loan and will repay almost $500,000 immediately and the remainder by selling surplus property, the county said. The county will also reduce staff and service levels to meet actual revenue projections, it said in its response.
The auditor's office also said the county needs to put measures in place to make sure it complies with federal grant requirements and improves documentation for monitoring organizations to which it provides money.
The county said money in question was returned to the correct fund and it has made a form and checklist to monitor distributed money.
Another audit report from the office states the county did not manage its equipment rental and revolving fund (used to cover the cost of equipment, vehicles and materials) in 2010 and 2011, causing restricted funds to be used inappropriately. Rates were not high enough to recover costs for maintenance in 2010 and the county didn't charge for maintenance and operations cost in 2011, according to the report.
Commissioner Paul Pearce said that he and other commissioners will make sure there are separate funds to track replacement and maintenance funds in the future. Rates will be re-established, reviewed quarterly and billing will be monthly, the county said.