Auditor: Park County has ‘pretty healthy’ savings account

Posted 4/5/16

“The one thing I’ve found is you can’t compare a government to government, but in terms of where you stand, you’re on the upper side,” Paul Niedermuller of CliftonLarsonAllen told commissioners Feb. 16.

The auditors count cash reserves …

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Auditor: Park County has ‘pretty healthy’ savings account

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As Park County heads into some lean financial times, the good news is that it’s relatively flush with cash.

An auditor recently said the $16.5 million stashed in the county’s bank accounts puts it in comparatively strong shape.

“The one thing I’ve found is you can’t compare a government to government, but in terms of where you stand, you’re on the upper side,” Paul Niedermuller of CliftonLarsonAllen told commissioners Feb. 16.

The auditors count cash reserves differently than laymen do; by their accounting, the county has more than $19.3 million of “unassigned” funds. That’s enough money to cover about nine months of current operations — or 75 percent of a year.

“I think most governments would say 25 percent would even be adequate. Some would say 50 (percent), but 75 seems to be a pretty healthy reserve balance,” Niedermuller said.

If you use traditional measures and figure the county has $16.5 million in reserves, that’s equivalent to about 62 percent of the county’s budget. (Or enough to cover about seven-and-a-half months of current operations.)

The Government Finance Officers Association recommends keeping enough savings to cover at least two months of operations.

Niedermuller said it’s up to commissioners to find a balance between too large and too small reserves; he noted the county is highly dependent on taxes.

“Some of those are very up and down, so you have to be mindful that what you got last year ... could potentially not be there next year,” Niedermuller said. “You’ve got to navigate what you’re comfortable with in terms of proper cash reserves.”

Commissioners have indicated they may need to both cut back and tap into their reserves to make ends meet in the upcoming fiscal year, which starts July 1.

Decreased oil and gas production is expected to take a significant chunk out of the county’s budget.

The recently finalized audit covered the fiscal year that ran from July 2014 to June 2015.

Niedermuller said the county appeared to have kept up on its maintenance over the course of the year, as spending on equipment and facilities outpaced depreciation by $1 million.

 

Park County received a clean, “unmodified” opinion on its recent audit, but some problems remained.

CliftonLarsonAllen identified four material weaknesses — that is, deficiencies the auditor thinks could potentially lead to bad information or fraud going undetected — and five less severe “significant deficiencies” for the July 2014 to June 2015 fiscal year.

That’s up from three material weaknesses and three significant deficiencies for the prior fiscal year.

Two new findings made by CliftonLarsonAllen apparently stemmed from the transition of having the county fairgrounds run by a fair manager to having it overseen by an events coordinator.

One material weakness came from lack of documentation for tracking the Park County Fair’s petty cash.

“The receipts never matched what was in the money bag,” explained Park County Events Coordinator Echo Renner, who took over the fair very late in the fiscal year. She wants the fair to stop using cash for its business.

The fair also received a significant deficiency because events coordinator Renner and her staff were unable to find a contract her predecessor had signed.

Another material weakness, repeated from prior years, was that CliftonLarsonAllen had to convert the county’s financial statements from a cash to accrual basis.

The firm charged the county an extra $5,000 to do the work, for a total audit cost of $47,132.

The Park County Clerk’s Office has been making an effort to do more of the cash to accrual conversions.

“I think we’ve moved forward a lot,” said County Clerk Colleen Renner, who was in office for only the second half of the fiscal year. “Did we correct everything? No, we haven’t.”

Paul Niedermuller of CliftonLarsonAllen agreed there’d been continuing progress.

“It just didn’t get to the point where we were able to remove the recommendation,” he said.

Another repeated finding — that was raised from a significant deficiency to a material weakness — was a concern that some employees in the clerk’s office could get unrestricted access to the electronic books. Clerk Renner said her office will keep working on a system that addresses the auditors’ concerns.

The other material weakness cited by the auditors was concern that the county’s list of assets was out of date. Clerk Renner said her first deputy spent nearly half of last year plugging the county’s assets into a database.

While it still needs work, Niedermuller said the list was “in a much better place than it was several years ago.”

The other deficiencies, meanwhile, faulted how different accounts are tracked and laid out in the county’s books while another called for the county to have a written policy on when it updates its computer programs.

Commission Chairman Tim French thanked Niedermuller for the firm’s work and for pointing out the potential problems.

“We need to correct them because we want to be as good as we can be,” French said at the Feb. 16 meeting. “We don’t want something hanging out there that we’re not aware of or that’s not quite right.”

This was the final year of a three-year contract with CliftonLarsonAllen. The county will soon go out for bids on a new contract.

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