Audit finds Plumas is "one of the best"
Independent Auditor Norm Newell of Smith & Newell characterized Plumas County as “one of the better ones” in terms of financial management when he delivered the county’s annual audit report Tuesday, Feb. 15.
Newell told the Board of Supervisors the county earned an “unqualified or clean opinion,” which he explained was “what you want to have.”
“What that means is that everything of financial significance about the county has been presented in these financial statements.”
The outside auditor commented that the county’s mix of investments, with over 80 percent of Plumas’ cash in state or federal investment pools, was pretty consistent with what he saw in other counties.
Newell commended County Auditor Shawn Montgomery for making Plumas one of only five counties to have already adjusted to a new accounting rule that won’t go into effect until next year.
The rule involves breaking out fund balance, the amount of funding that carries over from one budget to another, so that the county can see what amount of that cash is actually freed up to be spent.
Newell pointed out $2.7 million of the county’s $6 million total fund balance was unallocated and could be used flexibly.
He told the board the Government Finance Officer’s Association recommended a county keep the equivalent of two months of operating expenditures in fund balance free, which would actually calculate out to $3.4 million.
“You’re not in trouble in any way,” he clarified. “It’s just a recommendation.”
County Administrative Officer Jack Ingstad reminded the board that was a different number than reserves, which were currently near 10 percent of the total budget, which is the ratio the county usually aims at.
In the audit’s management report, Newell explained the county didn’t have any landfill insurance, which his company recommended the county should acquire.
Montgomery told the board the county transfer stations and landfills were currently covered for accidents like slips and falls by employees or the public and that Newell was talking about separate insurance to cover liability from environmental disasters like hazardous material leaking out of a transfer site.
Newell’s written report indicated Montgomery encouraged Public Works Director Robert Perreault to get the insurance last March in her capacity as county risk manager.
The document added that the public works manager researched the issue and didn’t agree that the insurance was necessary at the time.
It concluded that Montgomery would bring the issue before the Board of Supervisors in the near future for a final decision on the matter.
Board chairwoman Lori Simpson asked Newell if the county’s occasional cash flow issues were typical in the state during the downturn.
Newell confirmed that was the case, adding, “There are instances where counties have a deficit.”
Ingstad argued that Plumas was actually in far better shape than most counties.
Newell agreed, “You are one of the better ones.”