Auditor gives Florence County a clean bill of health
FLORENCE, S.C. – Florence County received a financial reporting clean bill of health for the fiscal year ending June 30, 2018, according to an audit conducted by Elliott Davis LLC.
Brian D’Amico of the firm’s Columbia office recently provided an overview of the audit to the Florence County Council.
“I always like starting at our audit opinion, which is one of the most important pages in the document, immediately following the certificate,” D’Amico told the council last Thursday. “As in the previous years, we have issued an unmodified opinion which is the highest level of assurance that we can provide as your external auditor.”
In accounting, an unmodified opinion indicates that the auditor found that the financial reporting was done in accordance with the standards in place. For governmental agencies, such as Florence County, this means that the county reported within the standards set by the Governmental Accounting Standards Board (GASB).
County Council Chairman Waymon Mumford said the report made “all of us feel good” knowing the county is in a solid financial state.
D’Amico said the firm had tested the county’s internal controls and had to post a restatement. He said the county’s finance department actually brought attention to the finding, which is the way the firm would like to see the reporting.
He also said the county is in compliance with the standards in place for its use of federal funds. The county, he said, received an unmodified opinion in that area as well.
The county’s unassigned fund balance, which is used to fund county operations in times of low revenue, came in at $16.3 million. The fund balance was around 27 percent of expenditures and represents a little more than 3.3 months of funding.
D’Amico said Florence is about average in comparison with other counties in the state in terms of its available unassigned fund balance.
County balance sheet
D’Amico also outlined changes in the county’s financial balance sheet over the previous year.
The biggest change, he said, was the calculation of the county’s liability for post-employment benefits.
“Previously that liability was recorded under GASB 45, and GASB changed the standards and actually increased the measurement of how that accrual needs to be put in place,” D’Amico said. “Looking back last year, the county had approximately $15.5 million reported related to this liability. As part of implementation, we had to increase that liability by $24 million. At the end of this year, that liability sits at $38 million in total for the county.”
D’Amico added that the county’s liability for pensions also had increased to $65.7 million, an increase of approximately $2 million.
Another change coming is the implementation of a standard that will require the county to show its leases on its balance sheet. This change, he said, will come following a change in the standards for for-profit businesses.
D’Amico also praised the efforts of the county’s finance department and treasurer’s office. He said those offices made the firm’s job much easier.
“I want you to notice that the fund balance for the general fund increased to $19 million,” D’Amico said. “It was up from the prior year approximately $1.4 million.”
General fund revenues increased to $60.8 million, an increase of $2.6 million.
D’Amico said the increase was related to three things: taxes, sales and miscellaneous revenues.
“Your taxes make up approximately 64 percent of your totals revenues for the general fund,” D’Amico said.
Expenditures in the general fund increased by $3.8 million, an increase of 7 percent, in the fiscal year.
D’Amico said the growth in expenses are related to general government expenses and health. He also noted that the general fund’s expenditures came in under budget by almost $2 million.
The county’s other funds are a mixed bag.
The Florence County Utility System had a break-even year. Its ending position was $346,000.
The E-911 system had a positive change of $297,000. It ended the year with a net position of $3.4 million.
The landfill had a negative change of $1.1 million in its position. This change is related to the increase in liability accruals related to the landfill. Its ending position was $1.5 million.