County spent $7 million more than planned
Published 12:07 am Wednesday, November 17, 2010
NATCHEZ — Adams County’s amended budget from the last fiscal year, which shows what was actually spent during the 2009-2010 fiscal year, indicates the county took in and spent nearly $7 million more than planned.
But Chancery Clerk and interim County Administrator Tommy O’Beirne said the bulk of extra money was not actually earned or spent — just moved around.
He said interfund transfers and loans are used to cover certain costs throughout the year and are mostly responsible for the $7 million discrepancy.
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“(The interfund transactions) are turning money around within the fund,” O’Beirne said.
“(The amended budget) shows (the interfund transfers) being additional income when in fact it’s a wash.”
The amended budget for the fiscal year starting Oct. 1, 2009, and ending Sept. 30, 2010, was distributed to the board of supervisors last month.
The amended budget shows the county’s revenue was $31.06 million and expenses were $30.90 million.
The projected budget for the same fiscal year predicted revenues of $26.28 million and expenses of $26.28 million.
O’Beirne said the county also switched from Regions Bank to United Mississippi Bank this year, and those account transfers artificially padded the amended budget.
Excluding interfund loans, O’Beirne said the county’s true revenues were $25.94 million, which is approximately $342,000 less revenue than projected in the budget assembled at the beginning of the 2009-2010 fiscal year. The county’s true expenses — excluding transfers — were $26.29 million, which is $10,000 more than it projected it would spend.
O’Beirne said predicting exact amounts of revenues and expenses would be impossible.
O’Beirne said interfund transfers and loans artificially add to the county’s amended budget every year and in every county, but the add-on is rarely as high as $7 million.
The interfund activity add-on was approximately $2 million for the 2008-2009 fiscal year, for instance.
Grant funds often require interfund loans.
O’Beirne said the county has approximately 13 state and federal grant fund, which are either reimbursed after money is spent or paid at the end of each month.
At the beginning of the year the grant funds, which include Federal Emergency Management Agency, Homeland Security, and the adult and juvenile drug court programs, have a zero balance.
“We make interfund loans to kick-start the programs,” O’Beirne said.
Approximately $1.3 million was received and spent on grant programs last year, and much of the total was shifted around quite a bit.
O’Beirne said interfund transfers and loans are used to keep proper balances throughout the entire year — but especially from September-January.
Land taxes will not be collected until January, so the county’s only revenue comes from car tags and other state monies.
“Those are the lean months when we borrow money,” O’Beirne said.
He said the county’s funds are reviewed weekly, to ensure each department has money for what they need. And if one fund does not have what it needs, that is when interfund loans will be taken out and paid back later.
“It’s a continuous flow,” O’Beirne said.
He said an extra effort to keep the general fund’s cash balance in the black has also created more transfers than usual.
After the accounting books were closed Sept. 30, O’Beirne said the general fund balance was $391,000. The county is waiting to hear from Moody’s Investor services to see if it’s bond rating can be reassessed to reflect a positive cash balance.