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County’s general fund cash flow improving

Lawrence County has several different funds that flow through its overall budget. About 80 percent of the county’s funds operate without much fanfare because those funds are properly funded with enough cash flow to meet expenses throughout the year.

The general fund is about 20 percent of the overall county budget, but the general fund gets most of the attention due to its trouble maintaining a positive cash flow throughout the year.

It has the most pressure exerted on it from many different directions, such as unfunded state mandates, as well as high-profile and expensive functions of county government.

One would think the end of December would be when cash flow is the lowest, but that is not the case. Annual expenses that are due in the first months of the year, combined with the fact that the county’s portion of property tax is not deposited into the general fund until April, create a real cash crunch for the general fund.

Therefore, in order to simply meet payroll, the county must delay paying other general fund bills that are due in January, February and March. For Example: At the end of 2013 there was a year-end carryover of $1,241,352.46, but by February 2014, there was a $525,048.67 cash deficit in the main portion of the general fund.

This situation has been the case this for years, but the good news is the condition of the general fund is improving, dramatically. The 2014 year-end carryover balance for the general fund was $1,829,145.60, up considerably from years past.

Fortunately, the county’s revenues have grown due to increased sales tax revenue, but more importantly, officeholders and department heads whose budget is derived from the general fund have maintained level spending and stayed within budget.

For example: In 2012 the total general fund expenditures were $14,636,663.09, in 2013 expenditures increased slightly to $14,768,323.05, but in 2014 expenditures decreased to $14,755,239.60. That represents a change of only 0.81 percent in total annual expenditures over the past three years for the general fund.

The county is definitely on the right track with its spending and financial management, but by no means is the general fund flush with cash throughout the year. Once again in 2015, even with the current year-end carryover, many bills will be delayed in order to make payroll in January, February and March.

Ultimately, my goal as the county’s chief fiscal officer is to ensure that Lawrence County always has enough cash on hand at all times, to pay all bills, for all funds. We are very close to this goal.

Hopefully, 2015 will prove to be another step in the right direction of fiscal responsibility and good stewardship of your tax dollars. If you would like to study these numbers a little deeper, the financial reports for all of the county’s funds are posted on my website at www.lawrencecountyauditor.org.

May you and your family have a Happy New Year.

 

Jason C. Stephens, CFP

Lawrence County Auditor