BY JUDY SHERIDAN
Parker County received a clean opinion Wednesday from auditing firm Snow Garrett & Williams.
Kathy Williams, a partner with the firm, presented the annual financial report for the year ending Sept. 30, 2012, to the court.
“In our opinion financial statements are presented fairly in all material respects,” she said. “As of Sept. 30, 2012, the year ended in conformity with generally accepted accounting principles.”
The auditor did note a finding. A liability account in one of the agency funds had not been reconciled and was significantly overstated.
It was described in the audit as a significant deficiency on a Schedule for Findings and Questioned Costs.
“There’s an agency fund where state fees are collected, and that goes into a liability account to be paid back to the state,” Williams explained.
“But the liability account was not reduced when that liability was paid, and instead it was expensed in the general fund, so we had a significant journal entry that actually increased fund balance in your general fund and adjusted that liability to what it should have been.”
Williams said the firm was recommending the county reconcile agency fund liability accounts annually and set up different accounts.
“The plus side of this is that we actually have $400,000 that we didn’t think we had,” County Judge Mark Riley said. “This is one of those good things.”
“It was expended out of the general fund, and it shouldn’t have been,” Williams responded, “so actually it’s picked up as if it were revenue in the general fund.”
Williams pointed out several things out to the court.
She showed that total capital assets at the end of 2012 had decreased almost $2.4 million, from $75.9 million to $73.5 million.
“You had your $16 million in capital asset additions for the 2012 fiscal year, but then you also delegated over $15 million of infrastructure and land to local governmental entities, so that’s the main thing.”
The county’s debt decreased from $82.7 million to $80.1 million, reflecting normal debt payments, she said.
Total assets — on a governmental basis, not including capital assets — were noted as $27.8 million, with 87 percent of that in cash and investments,
Total liabilities totaled $3.7 million, so the total fund balance — the difference between assets and liabilities — came to $24 million.
Of that, $6.4 million was in the general fund, $3.9 million in the lateral road fund, $8.9 million in capital projects, and $1.8 million in debt service.
Total governmental revenues were $59.2 million, with $37.2 million from property taxes, $9.4 million from fees of office and $6.7 million from sales taxes.
Total governmental expenditures totaled $70.6 million, with $16.7 million due to capital outlays, $15.5 million for law enforcement, $11.3 million for judicial and $9.6 million for roads and bridges.
After accounting for another $540,000 from other financing sources, the net change in fund balance was a $10.9 million decrease, which Williams attributed mainly to the capital projects fund.
“As I have explained to you in previous years, that money all comes in on a governmental basis in one year, and it takes several years to spend that money,” she said. “That’s what you’re seeing, the spending down of that capital projects fund.”
Williams noted the $4.1 million positive change in the general fund balance, related to revenues increasing and expenditures decreasing from the prior year.
“What happened in having that increase in fund balance is your general unassigned fund balance is now at 19 percent, or 67 days of your general fund expenditures, and that’s compared to 6 percent the previous year, or 20 days.
“So that’s the first time we’ve seen that kind of increase in a long time. That’s a very good financial trend — to save some money and have those funds available.”
Williams also noted a $435,000 increase in the lateral road fund balance.
The audit reported the individual fund balances for each precinct, showing Precinct No. 1 with a balance of $1 million; Precinct No. 2 with a balance of $1.1 million; Precinct No. 3 with a balance of $872,000 and Precinct No. 4 with a $1 million balance.
A single audit of federal awards, which totaled $616,000 — mainly from the U.S. Department of Homeland Security — produced no findings.
“Over all it was a really good year, financially, for the county,” Williams said. “We have several things that we have spoken with the auditor’s office about, key areas to continue working on and some improvements to make.
“It was a good thing the agency fund liability came up, a good thing for everyone to learn from and move forward and handle a little bit differently moving forward.”
Riley thanked Williams and talked about how county processes have improved through the years through outside audits and proper internal auditing.
He attributed the growth in the unassigned fund balance to the county auditor’s office and the court.
Williams spoke to the importance of paying attention to internal controls.
“Just being open to changes in controls, strengthening controls, and having those procedures and policies in place and asking everyone to follow them consistently are key to keeping the county moving and growing improving,” she said.