JACKSON – It’s been a long time coming, but Northampton County officials finally received their audit for fiscal year 2016. Alan Thompson, a representative of the accounting firm who completed the work, presented the final report to the Board of Commissioners during their regular meeting here on May 21.

“The county is in pretty good financial shape despite the scenario that it went through,” Thompson reported.

As previously reported by the News Herald, the audit was delayed due to a variety of reasons. According to County Manager Kimberly Turner, the county had to go through the process of finding a new auditor after the previous one indicated they would not return to work on the one for FY 2016. The new auditors also needed extra time to familiarize themselves with the large amount of information they were working with.

In addition, Turner previously explained that a problem with the bank reconciliation had been discovered. After consulting with the Local Government Commission (LGC), the county hired a CPA firm to rectify that issue.

The combination of all these circumstances significantly delayed the completion of the audit.

The audit which Thompson presented to the Board of Commissioners covered the fiscal year beginning July 1, 2015 through June 30, 2016.

According to the audit report, general fund revenues for fiscal year 2016 totaled $32,573,954. Ad valorem taxes comprised 54.41 percent of this figure. The second largest source of revenue was intergovernmental revenue at 27.55 percent. Other sources of revenue included licenses, permits, sales, and services.

The general fund expenditures were lower, totaling $30,640,311. At 42 percent, human services were the largest source of expenditures, with public safety and then education making up the next two largest sources.

Thompson noted the county’s tax collection percentage was up to 95.54 percent. This continued the positive trend of rising collection rates from the previous five years. In 2012, the number was 93.68 percent.

The total fund balance in the General Fund was $11,981,381. That’s almost a $600,000 decrease from the previous fiscal year total, but Thompson noted that was due to transfers to other funds. The overall trend of the past five years was a positive increase in general fund totals.

Numbers aside, Thompson had a few other findings to report to the Board. Specifically, there were three areas to discuss: lack of technical expertise, prior period adjustments, and reconciliation of records.

“Our finding is that the county personnel did not possess the technical expertise required to comply with the financial reporting requirements,” Thompson explained about the first finding listed in the report. “This is for the year ending June 30, 2016. It’s not for current personnel.”

The second finding noted prior period adjustments they had to make during the course of the audit work. In the General Fund, an adjustment of $181,907 was made to increase that fund balance. Another adjustment was recorded in the Water and Sewer Fund that decreased its net position by $169,435.

The last finding reported by the auditors was a lack of records reconciliation. Thompson reported that a person recommended by the LGC came in August 2017 to help speed up the audit process. He said that person could not find any evidence that there had been a bank reconciliation in quite some time.

“When he says that to us, as an auditor I’m nervous. So I want to make sure everything is there,” Thompson explained. “We believe the financial statements are materially correct.”

After Thompson’s presentation, Commissioner Geneva Faulkner asked if he had seen the finance department put any processes into place to prevent the audit delay from happening again.

He answered that he couldn’t speak to current processes since his focus was on the financial records from fiscal year 2016, but he suggested the Board create an audit committee to check on things like the bank reconciliation each month.

“That would be a good internal control check for you as a Board,” he said.

Commissioner Charles Tyner’s question was about when to expect the fiscal year 2017 audit, which is also past due. Thompson said he couldn’t speculate on a specific time frame, but he said this next audit was not expected to take as long to complete.

To wrap up the question and answer portion, Faulkner asked if the county’s finances would be considered “healthy” for the fiscal year they were looking at.

Thompson directed the Board to compare the available Fund Balance percentage to the group weighted average from numbers across North Carolina. He noted how the county’s percentage (30.35 percent in 2016) was getting closer to the group weighted average (32.29 percent in 2016).

This was an improvement compared to previous years 2012 and 2013 where the county’s available Fund Balance was less than 10 percent while the group weighted average was around 25 percent at that time.

“The larger the entity, the more difficult it is to get to a higher percentage,” Thompson said, providing further context to the numbers.

At the conclusion of the presentation, Vice Chair Fannie Greene thanked Thompson for the information and the suggestions for future improvement.