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Audit report awards city highest-possible rating

Washington’s financial books are in excellent condition, according to an audit report presented to the City Council during its meeting Monday.

Lucas Jackson, an audit senior accountant with Martin Starnes & Associates, presented the report, which gave the city an unmodified opinion — the highest recognition possible — on its accounting procedures. The audit found no significant material weaknesses or deficiencies in the city’s internal controls over its finances.

Unlike the audit report on the previous fiscal year, this one contains no notices of violations. The city acted immediately to address those minor violations, mostly regarding the lack of budgets for some minor funds.

The report shows that the city took in $11,099,297 in revenue for its general fund (day-to-day operations) and spent $11,558,218, meaning the revenues did not cover expenses. The city dipped into other funds to cover the gap. Jackson, referring to a chart project on a wall, said the city’s fund balance (rainy-day fund) increased from $6,861,744 in the 2015 fiscal year to $7,269,872 at the end of fiscal year 2016, which ended June 39, 2016.

That increase did not impress Councilman Doug Mercer, who pointed out the fund balance for fiscal year 2016 is the second-lowest fund balance during the past 10 fiscal years. The lowest fund balance was for fiscal year 2015. Mercer, as he did at the council’s retreat Saturday, has been pushing for the city not to use money from the fund balance to help balance the general fund.

“I made a point at our meeting on Saturday to state to the board that this was the second-lowest fund balance we’ve had in the 10-year period that’s shown there. If it weren’t for the transfers this year, the fund balance from this year and last year would have been, essentially, flat,” Mercer said. The councilman said he would like to see the fund balance recover during the next several budget years, if possible.

Of that $7,269,872 fund balance, the city had $1,660,5289 that could not be spent because state law places restrictions use of the fund balance. That left an available fund balance of $5,069,344 in fiscal year 2016. In the previous year, that available fund balance was $5,065,333.

The Local Government Commission, which oversees finances of local governments, recommends a local government have a fund balance of at least 8 percent of its annual general fund budget. For fiscal year 2015, the city’s fund balance (general fund) was at 37.08 percent, increasing to 47.53 percent in fiscal year 2016.

Jackson said the available $5,069,344 is “well in compliance” with the LGC’s recommendation. He also noted the city’s revenue sources produced less money in fiscal year 2015-2016 than they did in the previous fiscal year.

About Mike Voss

Mike Voss is the contributing editor at the Washington Daily News. He has a daughter and four grandchildren. Except for nearly six years he worked at the Free Lance-Star in Fredericksburg, Va., in the early to mid-1990s, he has been at the Daily News since April 1986.
Journalism awards:
• Pulitzer Prize for Meritorious Public Service, 1990.
• Society of Professional Journalists: Sigma Delta Chi Award, Bronze Medallion.
• Associated Press Managing Editors’ Public Service Award.
• Investigative Reporters & Editors’ Award.
• North Carolina Press Association, First Place, Public Service Award, 1989.
• North Carolina Press Association, Second Place, Investigative Reporting, 1990.
All those were for the articles he and Betty Gray wrote about the city’s contaminated water system in 1989-1990.
• North Carolina Press Association, First Place, Investigative Reporting, 1991.
• North Carolina Press Association, Third Place, General News Reporting, 2005.
• North Carolina Press Association, Second Place, Lighter Columns, 2006.
Recently learned he will receive another award.
• North Carolina Press Association, First Place, Lighter Columns, 2010.
4. Lectured at or served on seminar panels at journalism schools at UNC-Chapel Hill, University of Maryland, Columbia University, Mary Washington University and Francis Marion University.

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