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Colonial Beach receives clean audit

Auditor Billy Robinson, of Brown Edwards & Company, LLP, issued the Town of Colonial Beach a clean opinion for fiscal year 2013, at the Nov. 21 town council work session. Mayor Mike Ham congratulated both the town and school board’s financial employees for their work. “This is the third year we have had a clean opinion, and it seems to be getting better every year.”

Robinson told the council, however, that there were some areas on which the town and school could improve. “There’s still some recommendations and internal controls that we recommend, however. We recognize with the size of the town and the size of the school board, that ultimately, you can only do so much,” Robinson said.

This is the second year that Brown, Edwards & Company has performed the audit. Robinson is confident his firm’s suggestions will be taken seriously, based on the improvements made by the town since the last audit.

“The town made great efforts. They really did take our comments last year seriously. There were several comments made on last year’s audit, and the town has made great progress on those.” Robinson added, “The town is very proactive in those things, and definitely should be commended for taking those items seriously.”

Robinson told the council that the town’s budget showed a negative balance of $245,000 in the General Fund “…Which is an area of concern.” Robinson said that if this continues, the budget would continue to deplete the fund balance.

“The town really needs to examine, more closely, how far off the tax projections were to the actual taxes collected. For property taxes, it was $122,000 less that budgeted (or projected), for other local taxes it was $82,000 less than budgeted.”

Intergovernmental showed $470,914 over-budgeted, but Robinson said, “That could just be some grants that you thought you were going to get, that you did not, or the timing of those, maybe you got them and just weren’t able to spend them.”  Robinson said that is why he is not too concerned with those numbers.

Robinson pointed out that under Expenditures, the town budgeted for $6,644,465, but it actually only spent $5,890,309 - leaving a positive balance of $754,156.

Although this may appear to the average person as being good - like finding an extra $100 bill in your jacket pocket, Robinson said, “I think you should look at how you’re budgeting your money, particularly your tax items. While they are not completely predictable, there should be some trends that could be identified to better budget those items.”

Robinson advised that many localities do what they can to set a balanced budget, but conscientiously use money from the fund balance to complete a project. Robinson warned, “If you’re going to do that, and I’m not saying you are, but don’t do it by making revenues appear to be larger than the actually are.”

Robinson suggests when conscientiously using money that has not already been projected through proven projections, the town should keep records using a line item entitled “use of fund balance”.  Robinson said that would give the town a more accurate picture of spending.

Because the town incurred a debt to Rural Development for sewer upgrades, the town had to separate the water fund from the sewer fund, to show Rural Development the viability of these funds. The financial statements show that the sewer revenue taken in was $253,000. Robinson advised that principal and interest on long-term debt ran about $670,000 this year, which leaves a deficit the town is going to have to make up. However, the water fund had a small surplus. Robinson said that localities can transfer money between these funds. “But,” he reminded, “Ultimately, you’ve got to have the cash in that fund to do it.”

Robinson brought to the council’s attention that there is an obligation from the school board to the town for $338,487 that is from since before his firm has been working on the budget. Robinson said he is not suggesting requiring payment, but said if the town doesn’t, they should take action to remove this debt from the books.

It was believed by Mayor Ham and Councilman Gary Seeber that this debt dated back to some architectural work done several years ago, which did not result in any action.

In closing, Robinson reported that this year, there are significantly fewer audit adjustments, which shows continued improvement in financial reporting.

There were a few highway maintenance issues. Robinson said that because it was the first year the town has taken that on, his firm was not surprised. Robinson said that the issues were minor, and the town was taking action to correct them.

Public safety and health & welfare spending exceeded budget amounts by $61,000 for public safety, and $800 for health & welfare. Robinson advised that the town should be making adjustments throughout the year. Virginia Code states it is a violation to spend in excess of appropriations.

Town Manager Val Foulds told Robinson that his comments were not falling on deaf ears. She outlined steps the town has taken to cut costs, such as a hiring freeze, separation of duties, and risk management.

Robinson acknowledged that while it is obvious that the town is being frugal with its resources, ultimately, you have to make some decisions based on the risks. Robinson added, “Employees are diligent and working very hard.”


Linda Farneth

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