Audit delivers good news

Published 5:30 pm Tuesday, January 28, 2020

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AHOSKIE – The numbers look good.

That’s according to what a review of the Town of Ahoskie’s Financial Statements for the fiscal year (FY) that ended June 30, 2019 showed at its presentation.

Belhaven-based CPA Jeff Best, who is under contract to audit the town financial statements, presented his findings at the January meeting of the Ahoskie Town Council.

According to the audit report, the assets and deferred outflows of resources for the town exceeded its liabilities and deferred inflows of resources at the close of the fiscal year.

Due to decreases in business-type activities by the town, the government’s total net position decreased by $187,050.

The largest portion of that reflects the town’s investment in capital assets (i.e., land, building, machinery, and equipment); less any related debt still outstanding that was issued to acquire those listed items.

Because the town uses these capital assets to provide services to its citizens, these assets therefore are not available for future spending.

An additional portion of the town’s net position, $1,188,780, represents resources that are subject to external restrictions or commitments on how they can be used. The remaining balance of $3,981,176 is unrestricted.

At the close of the current fiscal year, Ahoskie’s government funds reported combined ending fund balances of $1,583,444, showing a net increase of $291,253 in fund balance. A little better than three-quarters (75.08) percent of this total amount, or about $1.18 million of that total. is restricted.

As of June 30 2019, unassigned fund balance for the town’s General Fund was $394,664, or a little more than seven percent (7.02) of the total general fund expenditures for the entire fiscal year.

The town’s total debt decreased by $1,268,717 (5.16 percent) during the current fiscal year, with the key factor in the decrease due to the repayment of the town’s debt.

The government fund debt for installment purchases (fire, police vehicles and maintenance equipment) decreased by $855,725, with a beginning balance of $6,781,874 and an ending balance of $5,926,149.

The business-type fund debt for installment purchases, general obligation bonds, and revenue bonds decreased by $380,887 during the fiscal year. This follows a beginning balance of $12,819,030 and an ending balance of $12,458,143.

While the town had a tax collection rate of 97.19 percent in 2018, it decreased to 96.66 percent for FY 2019. While the statewide average collection rate is 98.78 percent, Ahoskie’s current rate is comparable to other small towns in North Carolina, Best noted.

Governmental activities increased the town’s net position by $36,217 after transfers, going from $3,056,821 to $3,093,038 at the end of the fiscal year.

Business-type activities decreased the town’s net assets by $223,267 after transfers or $13,667,421 from $13,444,154 in 2018. Key to the increase: increases in operating revenue from the previous year: revenues collected were $3,654,691, while operating expenses amounted to $2,914, 215 (up from $2,749,522).

Ahoskie’s total General Fund budget was $5,832,867 for 2019-2020 with ad valorem taxes the highest source of revenue, with the remaining revenue streams primarily local option sales tax and utility franchise taxes, or about $1,600,500 of General Fund revenues. There was no change in the $0.81 per $100 of evaluation tax rate; fees (water, sewer, garbage, zoning, inspections) remained the same, as did garbage rates.

The town uses these revenues to maintain its level of service to its citizens as well as maintaining programs that are already in place.

Budgeted expenditures increases could be traced to factors such as increases in employee insurance, funding of employee benefits, and increases in utilities.

In business-type activities, the 2019-2020 Enterprise Fund Budget is $4,027,962, revenues for which come from water and sewer fees, reconnection fees, and tap fees, among others.

The town’s goals are to increase its fund balance by $140,000 and to pay off debts.

“To recap, the town has $1.6 million in cash as of June 30, but there are requirements and obligations,” Best said in conclusion.

“You saw some good things,” Best added. “You saw debt decrease, you saw unassigned fund balance increase for the current year, you didn’t have a material or significant weakness in your audit, so there are some good things here. You all have done some good things; good job.”

Following the presentation, Councilman and Mayor Pro tem Charles Reynolds commended the town for its fiscal undertakings.

“I feel really good,” Reynolds noted. “We’ve reduced the town’s debt from $26.8 million to $18 million; and all the bills are paid.”

“The Board (Council) has made a lot of tough decisions to get here,” said Town Manager Kerry McDuffie. “But this is not the end, and we’ve still god tough decisions ahead, but this shows a very good job.”

Reynolds then made a motion to accept the audit, seconded by Councilwoman Jamie Burns, and it was approved unanimously.