Auditor Chip Summers congratulated Eutawville Town Council at its March meeting.
“The town received an unqualified opinion” for its fiscal year 2017 audit, “which is the highest opinion a municipality can receive in a governmental report,” he said.
“Your financial position improved a good bit” from fiscal year 2016, he said.
He said the town budget anticipated a loss for that year: $279,764 in revenues and $302,445 in expenses. However, actual revenues were $468, 892, which exceeded actual expenses of $458,006. So the town ended the year with $33,567 more in the bank than officials expected.
Some of the money can be spend only for certain designated uses. The rest is “unrestricted” in terms of how it can be spent. Summers said the unrestricted fund balance “has gone from a deficit to a positive over the last four or five years. It’s as high as it’s been since we’ve been doing the audit. That is outstanding.”
Summers pointed out two areas of concern, both of which crop up frequently in many towns’ audits.
The first are is utilities. Water revenues rose slightly – less than 1 percent – but wastewater operational costs rose by approximately 14 percent. Utilities a profit of $42,326 before the council transferred $42,727 into the general fund.
Not only are towns discouraged from intermingling general revenues and utility revenues, but the town still owes $151,588 on its U.S. Department of Agriculture utility bond. Summers said the town could save tens of thousands of dollars in interest by applying utility fund profits toward repaying the bond earlier than scheduled.
The second area of concern is the victim assistance fund.
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State law requires local governments to deposit a portion of each traffic fine into the victim assistance fund. But when it comes to spending it, even the state employees who run the program say that the rules are strict and often confusing, he said.
When a local government spends victim assistance money in a manner that state officials reject after the fact as an improper expense, they must repay the victim assistance fund with general fund money.
That risk has long made local governments wary of spending the victim assistance money, he said.
Some handed the money over to a government agency or private utility that is experienced in dealing with victim assistance funds, such as the sheriff’s office or CASA Family Systems Inc.
Other local governments, noting that there had been no deadline for spending it, simply stockpiled it in the bank.
But that wasn’t helping any victims, which is the intent of the fund, so the state legislature passed a state law requiring local governments to spend at least 90 percent of their victim assistance funds in the year they are collected, or they must turn over to the state all but $25,000 of the balance, Summers said.
Overall, he said, “The town is in the best shape it’s been in since we’ve begun doing the audit” seven years ago.
He credited former Mayor Jefferson Johnson, who “made the conscious effort to try to build working capital for the town because it didn’t have it.”