The Fannin County Board of Commissioners was issued an “unmodified” or “clean opinion” financial report for 2019 statements by Gainesville based auditors, Bates & Carter, during a meeting Tuesday, August 25.
“This is the best report that one can get from an audit, and it means that the financial statements are presented fairly with generally accepted accounting practices,” Auditor Amanda Wilkson said.
Wilkson explained that General Fund income states show revenues exceeded expenditures by $313,000.
“More money was brought into the county than was spent in the General Fund,” she said. “Overall revenues in 2019 increased from what was brought in in 2018 by $623,000, or about 3%. That total increase is mostly related to taxes increasing by $909,000, and that increase is usually seen in property taxes and sales tax increases.”
Intergovernmental revenue from Payment in Lieu of Tax (PILT) agreements decreased by $352,000, and charges for ambulance services increased by $288,000.
Intergovernmental grants decreased by $365,000, which was mainly due to PILT payments from TVA.
Hotel/Motel tax revenue transfers to the General Fund increased by $293,000.
“This shows an increase in the population that’s coming in and vacationing in this county,” Wilkson said.
Wilkson explained that overall revenues exceeded the final budget by $1.35 million, predominately due to motor vehicle taxes being more than the budget assumed they would be by $396,000, LOST taxes were over budget by $734,000 and Insurance Premium Taxes were over by $102,000.
Expenditures in 2019 decreased by $999,000, or 5%, compared to 2018 expenditures, and overall expenditures were below the final budget by $359,000.
According to Wilkson, at the end of 2019, the county had enough available in reserves to fund operations for seven months.
“Reserves and fund balance was built in 2019 coming into 2020,” Wilkson said.
The county had $3 million in long-term debt at the end of 2019. This can be seen in $20,000 in notes from direct borrowings for the Volunteer Fire Department, $2.2 million in ACCG Installment Sale and $797,000 in capital leases.
Wilkson explained that the average general obligation debt for counties around the same size as Fannin County is $8.6 million.
“I think there are some really great signs that the county is managing its money well, and that it’s preparing for growth,” she said.
Chairman Stan Helton asked Wilkson to explain that it was improper for government accounting to net out expenses with revenues coming in to particular departments.
She said, “One of the main differences when it comes to governmental accounting as opposed to accounting for other businesses is that when we are conducting budgets for a government, it’s supposed to be expenditure driven, meaning that you assess what it costs to maintain the services, or what services you’re offering to your constituents, and then see how the revenue comes in matches against the cost that it takes to fund the government.
“The standards that are applied to governmental accounting come from the Governmental Accounting Standards Board, the GASBY, so it’s a different level of reporting than what is focused on for commercial businesses, and one of the focuses that they have is that specifically you do not net revenues and expenditures together, because the point of the expenditure line is to show what it actually costs, and if you under inflate that number by decreasing it by associated revenue, then you’re expenditures are not appropriately shown.”