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Auditors offer ways to improve Washington County operations

While Washington County received top marks on its 2010-2011 audit, several suggestions for improvement were offered.
Melissa Steagall-Jones, of the county’s auditing firm Blackburn, Childers and Steagall, reviewed the document with the Audit Committee during its Dec. 9 meeting before presenting it to the full commission Dec. 19.
“It’s an unqualified opinion, which is the best we can give,” Steagall-Jones told Audit Committee members.
As of June 30, liabilities of the county’s primary government exceeded its assets by $55 million, while the Washington County Board of Education, considered a component unit of the county, ended the year with net assets of $102 million.
“The schools own the buildings, but the county carries the debt,” Steagall-Jones said, explaining one of the reasons for the large difference in total net assets.
In regard to the budget process, she said the ideal date to have a first draft is May 15, with a finalized version by July 16.
“After Sept. 3, the state will start withholding money from the Department of Education,” Steagall-Jones said.
The auditors also recommended two new positions, if funds allow: an Information Technology Specialist to serve the county and an Insurance/Human Resources Specialist with centralized responsibilities.
Steagall-Jones said BCS conducted an insurance comparison between the sign-up reports and the amount deducted from payroll, and found enrollment forms are not being completed annually.
“The information is spread out among who is signing people up, who is paying the bills, and this causes confusion and mistakes,” she said. “We also had officials who may have extended FMLA time for employees and may not have had the authority.” Nine mistakes were found in the insurance area.
In addition, Steagall-Jones said nonprofit organizations receiving appropriations from the county are supposed to send in financial reports to be on file with the county clerk’s office, and this is not always done.
During the presentation to commissioners, Steagall-Jones explained the State of Tennessee is the body that actually approves the audit.
While letters were issued to office holders with reminders about correct process, the auditors found no material weaknesses, no disagreements with management, and nothing out of compliance with major programs.
Commissioner Ethan Flynn asked if it would be wise to start putting money aside now if the county anticipates an increase in expenses, but Charles Steagall, also of BCS, said absolutely not.
“You don’t want to burden the taxpayers by building up a balance,” he said. “I would be jumping up and down as a taxpayer.”
Raising property taxes would be an option, but Mayor Dan Eldridge offered another way. “You do what we’re doing now. Get focused on growing the tax base,” he said.
Additional highlights from the Management’s Discussion and Analysis of the county’s financial activities for fiscal year ended June 30 are:
• The unassigned fund balance for the general fund was $12,816,210, or 38 percent of the total general fund expenditures.
• A net reduction in debt of $6,965,674 was accomplished by paying off some capital outlay notes and restructuring the callable 2004 series bonds.
• An increase in long-term debt and a decrease in net assets of $1,048,442 was incurred as the result of recognizing an actuarially calculated obligation for postemployment benefits (primarily health insurance) as a long-term liability.