12/27/06 — Duplin to keep close eye on expenses

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Duplin to keep close eye on expenses

By News-Argus Staff
Published in News on December 27, 2006 1:49 PM

Despite more than $1.4 million in recent expenditures, the Duplin County Board of Commissioners is heading into 2007 with its available fund balance projected to be in good shape when the fiscal year ends on June 30.

But, county finance officer Teresa Lanier said when work begins on the 2007-08 budget in a few months, county officials will continue to keep a close eye on how they're spending that money.

At the start of the current fiscal year, the county's budget was approved with expected expenditures outpacing expected revenues by about $3.7 million -- a deficit scheduled to be made up using the fund balance because the county is required to have a balanced budget.

Since then, another $855,000 of the fund balance has been tied up in restricted funds for the public schools, the health department and other county agencies, and $1.4 million has been allocated to the schools, James Sprunt Community College and the Sheriff's Office.

All total -- according to the county audit report, which should be finalized sometime in the next few weeks -- the commissioners have committed nearly $6 million of their available $13.19 million, leaving a projected $7.22 million in the bank for 2007-08.

Of course, Ms. Lanier said, that projection could change if the commissioners decide to dip further into the fund or if county departments don't spend all of their allocations.

In recent years, despite budgeting out of the fund balance, the county hasn't had to actually spend that money, allowing the fund balance to grow slightly since 2004.

"They had to have it (fund balance dollars) for budget, but they were fortunate departments were frugal and did not end up having to use it," Ms. Lanier said.

But, she continued, she's still planning on the available fund balance being only about 14.5 percent of the county's expenditures -- a good, but not great amount.

"Once you budget it, you no longer have it," Ms. Lanier said. "Once I budget it, I have given it to the departments and they have until June 30 to spend it, so we have to look at it as if it's gone.

"It's a conservative approach."

North Carolina counties are expected by the state to maintain a fund balance of at least 8 percent of their expenditures. A better number, Ms. Lanier said, is 12 percent and counties about the same size as Duplin (those with populations between 50,000 and 99,999) average a fund balance of 22.73 percent.

"(Right now) it's in fair shape," Ms. Lanier said. "It's not up to the average of similar counties, but it's not to the point the Local Government Commission is going to send a (warning) letter."

However, if everything comes in at their projections and if the commissioners continue to make large allocations from the fund balance next year, she said, the county could begin to see itself in trouble.

"Our expenditures are growing, but our fund balance is not growing as fast. It's kind of a catch-22 because of the direct relationship between the two and I'm worried that in the future, at some point in time, it will catch up to us. This is a high amount to budget year after year," Ms. Lanier said.

But, she continued, the audit should serve as a warning to commissioners.

"It's giving them a heads-up that they need to be careful and thoughtful in what they do and begin developing new revenue streams," she said.

The commissioners are expected to hear cost-cutting and revenue-creating recommendations from their fiscal advisory committee in January.