Budget Adjustment Spread Out Department Overages

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Courthouse budget adjustment

Blue Ridge, Ga – Auditors recommended adjustment of $20,699 or three percent of the 2018 budget, which led to calls for clarity as to why some departments were showing over.

Chief Financial Officer Robin Gazaway presented the auditors Rushton and Company’s recommendation to adjust each line item by three percent as a result of overestimation in the initial report. Also, the adjustment spread out the amounts from departments or categories that went over in 2018. Three percent over or under is the traditional amount auditors use to justify budgets.

“It’s just for the financial statements and everything to make it look presentable for everybody, explained Gazaway, “for the general fund, I estimated that we would go into fund balance at about $556,000, and after the audit and all the adjustments, we only actually used a fund balance of $536,000.”

Gazaway and Johnson participated in a lengthy discussion about the need for the adjustment and keeping commissioners’ updated on the budget.

When reviewing the budget, Post One Commissioner Earl Johnson stated, “Though we may be $20,000 under what was total budgeted, some of the different categories and department of the county, going down the list, a lot of these have gone way over budget. We’re going to have to figure out a way that when they’re close to going over budget, the board needs to know about it.”

Gazaway used the Fire Department as an example, “They were like $700,000 over budget, but that’s an accounting adjustment that I have to make because of the lease payment on the three fire trucks. Technically, the only expense that is out of that is the first lease payment, but when I have to in accounting at the end of the year, I have to put the full amount on the books, and that is what made them look way over budget.”

According to Gazaway,  the capital lease revenue item washes out the majority of the expense, which still shows the Fire Department a little over budget. It’s currently around $18,000 over for the year 2018.

Health insurance went over $1.8M for the year, but Roads and Bridges was $498,000 under for the year.

The auditors adjusted the Roads and Bridges budget by $254,000, so it fell into the three percent recommendation. Since the category underspent, it took on some of health insurance’s overages from 2018.

“Their issue is over/under three percent. Even if you save a lot of money according to this, it could turn out negative,” stated Chairman Stan Helton.

Gazaway clarified that auditors want budgets to stay close to the actual number, so they can easily explain it to the state. Therefore, each line item adjusted by three percent to fall as close as possible to the actual budget number.

The initial budget featured Gazaway’s prediction for the year.  The amended budget revises that number and produces another total, but trouble starts when the final amended number exceeds the initial yearly budget.

“This is one of the only things I can judge by, where people wound up at the end of the year, said Johnson, “I guess I should just get a copy of the actual amount that every one of departments stood for the year.”

Helton suggested the auditors arrive early and meet with the commissioners to answer any questions about the final budget.

Johnson also addressed the need to know when departments go over or likely to go over budget. Due to the monthly budget reports showing a month behind, the commissioners vote to spend money without current budget estimates.

Gazaway explained that she speaks to unexpected expenses in her reports, and she can send her monthly summary to the other commissioners.

Rushton and Company should present the final amended budget and answer questions on the budget adjustment at the next Board of Commissioners’ meeting on June 25.

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