Concerns outlined following audit

By Debbie Hall and Cory L. Higgs

Patrick County’s annual audit, though considered ‘clean,’ came with several written recommendations “regarding certain matters involving the internal control structure and other operational matters.”

Scott Wickham, of the auditing firm Robinson, Farmer, Cox Associates, PLLC, presented the recommendations and/or concerns to the Patrick County Board of Supervisors on Monday.

They also were outlined the recommendations in a memorandum to County Administrator Tom Rose.

According to Wickham’s report, the first had been verbally discussed in the past, according to, who presented the report.

“As discussed in prior years verbally, the county continues to operate on an unbalanced budget. We recommend the county implement a plan to operate on a balanced budget,” the memorandum stated.

The county really needs to “get to work on getting that budget balanced,” Wickham said. “We have mentioned it over the last 4 years, but it continues to be an issue,” he said.

Procurement also is a concern, according to the memorandum and Wickham.

During the firm’s review of procurement, “we found the county had not obtained bids/quotes for waste hauling. We recommend the county obtain bids as required by the Virginia Public Procurement Act,” the report stated.

“We want to make sure the county is in compliance,” Wickham noted.

A couple of concerns were noted with respect to the Patrick County Public Service Authority (PSA); the first had to do with billings and collections.

“During our test of water and sewer billings, we found 1 of 40 bills to be calculated incorrectly. We recommend the PSA periodically spot check their billing register by recalculating the bill with the current rate structure,” according to the memorandum and Wickham.

Additionally, auditors noted that the most recent audit of the Town of Stuart was in fiscal year 2014.

The town “handles the billing and collections for the PSA … Since the Town is not getting regular audits, we recommend the PSA increase the level of review regarding their billings in comparison to their collections,” according to the memorandum.

“It would be a good practice to compare the listing of customer deposits on file to the billing reports and collections against the billing reports to ensure everyone is getting billed properly and the collections received from the town appear reasonable,” it added.

In June, the county approved an 11-cents increase to the real estate levy, and adopted resolutions to restructure certain debts and obtain a $3.5 million Revenue Anticipation Note. All of the efforts were to help offset the budget shortfall, improve cash flow and gain interest rate savings.

“As a result of the refinancing, the total debt service payment is reduced by $149,736 over the next 32 years and the county will see an economic gain of $73,298 (based on the difference between the present value of the old and new debt),” according to the Management Discussion and Analysis of the audit.

With respect to school funds Wickham said the division does “good job of monitoring expenses.”

Lock Boyce, of the Mayo River District, noted the county “paid more than $3 million in principal on the PSA loan, and over and over we were told” that “we ran up out outflow and that we were $3 million (in debt) over revenues. That was used as an excuse to raise the taxes 20 percent.”

Wickham said refinancing of the PSA debt was included in annual projections that supervisors approved.

“No, I don’t remember that we were told we would pay $3 million debt. It should be a one-time deal, right,” Boyce said, adding that he believes if taxes are raised to pay that debt, the increase should only be for one year.

That’s one thing—I think finally I got my answer as to where’s the hole in the bucket. This $3 million that was paid to pay off principal for a PSA debt—and I think  my questions about it could have been answered real quickly if someone had just said we spent $3 million paying off principal on PSA money,” Boyce said. “But somehow, that specific thing was not presented to us.”

“I’m telling you this $3 million plus dollars was added into our General Fund expenditures. We paid off principal,” Boyce said. “If you’re gonna say we’re gonna raise the taxes 20 percent forever, and we’re going to raise them again next year … I think you have to be a little more careful about raising taxes.”

Rickie Fulcher, chairman, said the county must address the issues.

Remaining supervisors said they did not have questions about the audit.

Wickham said that in conclusion, “the audit went very well. I still am concerned about the financial condition of the county, but the audit itself went very well.”

 

Subscribe

more recommended stories