Managing public funds

On Tuesday, August 6 the Goochland county Finance and Audit committee, attended by representatives from the Board of Supervisors, county staff and school division, met to kick off the audit for FY2019, which ended on June 30.

Mike Garber, principal with PBMares, the outside accounting firm retained to prepare Goochland’s certified annual financial report (CAFR), said that, for the first time in ten years, Goochland is no longer a high-risk auditee. This designation was the result of years of dysfunction and mismanagement capped off by the embezzlement public funds by a former treasurer.

Garber also reported that the transition audit, mandated at the retirement of our previous treasurer, Pam Johnson on June 30, was clean. Pam Duncan, who was appointed county treasurer after Johnson retired, is a candidate for the office and in attendance at the meeting.

Error free audits are the result of a lot of hard work and attention to detail, and adherence to policy by every county department, school staff and all Constitutional Officers.

It was a bit troubling that Neil Spoonhower seeking the District 2 supervisor seat, was the only candidate new to county government who attended the meeting. Stewardship of public funds is the most important task of elected officials and they must be able to understand the county’s complicated budget. 

(Please take a look at past CAFRs, especially that from 2010, available on the county website http://www.goochlandva.us/ under financial services.)

Board Vice Chair, Susan Lascolette, District 1, a member of the audit committee, raised concerns about an incident in Spotsylvania County, where a phishing scheme recently stole $600,000 of public money.

County Director of Finance Barbara Horlacher and Schools’ Finance Director Debbie White said that there are many internal controls in place in Goochland government financial activities. Vigilance on the part of all staff to question anything that looks “off” and receive confirmation of transactions through other means, by a phone call, perhaps, is the best way to combat these assaults.

Garber explained that the annual audit includes testing to ensure that controls stated in policy work in practice. For instance, an employee will be asked to access an account, which they have no authority to use, just to make sure safeguards are working. He also said that PBMares does not opine on internal controls but does look at them and offer suggestions for improvement.

Among PBMare’s many local government clients in Virginia, Goochland is usually the first to approve its CAFR before the late November deadline established by the state, observed Garber. For the past few years, Goochland supervisors have held special called meetings for this purpose.

Horlacher presented the latest update on year end numbers, which are not yet final. The county took in approximately $5.8 million more than it spent. The overage will be used for items not included in the approved budget with some funds set aside for the county’s revenue stabilization, AKA the “rainy day”  fund, to, as District 5 Supervisor Ken Peterson likes to say, “smooth out lumps” caused by economic downturns without raising tax rates.

Horlacher explained that the supervisors would be asked to approve—which they did during the regular meeting—a request for a one-time transfer of $60,000 to the Goochland Social Services Specialist Welfare Account. Due to vacancies and the receipt of additional funds due to Medicaid expansion, the Social Services Department had a larger than usual balance of local funds remaining at the end of the fiscal year.  Of those funds, $30 K will be for Special Welfare Foster Care Discretionary with the balance going to Special Welfare Discretionary expenses.

The supervisors also agreed to a request from schools to amend the FY 2020 capital improvement program (CIP) budget by reallocating $300 thousand from school projects funded with FY2019 amendments for the generator project at Byrd Elementary School that came in over budget due to a bad estimate.  Debbie White,  school division director of finance, explained that the overlap of the end of the school and fiscal year, and need to complete the projects during the summer, caused the need for reallocation of available funds. This does not require additional funds, but policies in place require approval of the Board of Supervisors to move money from one account to another in excess of a certain threshold.

Horlacher said that phase I of the county’s new enterprise resource planning software has been successfully completed. The board authorized County Administrator John Budesky to execute a contract for not more than $99,433 with Berry Dunn McNeil & Parker, LLC for transitional project management services for phase 2, which includes the human resources and payroll modules.

During the regular afternoon session, both Board Chair Manuel Alvarez, Jr., District 2 and Budesky commended those involved in the massive countywide software update, which will replace old systems with new and connected software for improved productivity. Phase 1 was completed on time and on budget, “not an easy task,” observed Alvarez.