Genesee County came out much better than expected in terms of its financial health in 2020, according to the certified public accountant who conducted the municipality's yearly audit.
“You fared fairly well. You had budgeted a deficit, and you actually came out better than you had anticipated,” said Kathryn Barrett, director at Freed Maxick CPAs, P.C., as she and colleague Nicole Ryan summarized their report earlier this month for the Genesee County Legislature.
Barrett said the county took in about $5.3 million less than budgeted in 2020 (its fiscal year is January through December), but spent about $8.5 million less than budgeted.
“So, budget to budget, you did much better, and that helped build that positive fund balance,” she noted, adding that the audit uncovered no deficiencies or material items.
The county’s net position of primary governmental activities increased by $4.2 million from 2019 -- to $149.5 million, and its net position on business type activities increased by $2.9 million, she reported.
She said the audit looked at two sets of financial statements -- government-wide or “a picture of what you look like as an entity rather than a fund by fund basis” and fund basis or “how you look at yourself and manage your operations on a day by day basis.”
Genesee, at year's end, had a deficit of $19.8 million in the Tobacco Asset Securitization Corporation (which handles tobacco settlement funds), which is consistent with prior years, Barrett reported. The county, however, had positive balances in the self-insurance ($3.1 million, up $810,000); Workers’ Compensation ($1.8 million, up $1.2 million); and water ($3.9 million, up $1.4 million) funds.
Barrett said the county’s participation in the New York State Retirement System this year has had a significant impact on government-wide operations. She said the plan is underfunded, but some of that has to do with the fact that the plan was measured on March 31, right at the beginning of the COVID-19 pandemic.
“That increased the net liability on the government-wide financial statements by about $5.4 million – it almost doubled from what it was last year,” she said. “So, that can go up and down in any particular year because of the assets that are invested in the open market and how they are performing at any particular point in time.”
Noting that the retirement system is funded at high levels – 96.3 percent in 2019 and 86.4 percent last year, she said it was a “temporary blip” and the county could see “a complete turnaround next year …”
Looking at the fund basis figures, the overall fund balance increased by $1.3 million in the general fund to a total fund balance of $44.4 million. She said the county used about $10 million of its capital reserve, but also set money aside for 2021 to offset any revenue loss, and also appropriated money for sales tax, Medicaid and jail debt service.
On the revenue side, revenues decreased by $1.6 million or 1.5 percent, again better than anticipated, while expenditures decreased by just less than $500,000 or .5 percent.
She said the county is considered a low-risk auditee, based in part on spending $2.2 million less in federal funding from 2020 to 2019.
For 2020, the county’s primary government invested $7.3 million in governmental activities capital assets, including $2.1 million in construction work in process, $280,000 in buildings and improvements, $3.7 million in infrastructure and $1.2 million in equipment, machinery and other capital assets.
The county tax rate was $10.11 per $1,000 of assessed value in 2020, up 7 cents per $1,000 of assessed value from the 2019 county tax rate.
Ryan commented on the management report section of the audit, stating, “We didn’t have any findings from the single audit and usually those are the most lengthy findings that we would have.”
She also said she found no significant issues.
One operational matter involving cybersecurity was identified, Ryan said.
“Our risk advisory services provide a little more of an in-depth look from the cybersecurity perspective, from that IT (Information Technology) perspective,” she said.
Barrett said Freed Maxick’s advisory group would be available to assist the county in addressing this issue.
“They’ve helped other clients in this area identify weaknesses and help them remediate and put together a plan of remediation,” she offered.
