County steps out, passes new fiscal year budget without audit         

[OCT. 24, 2006]  LINCOLN -- The Logan County board met in a special recessed adjourned meeting on Monday evening. The topic of the evening was the county 2006 – 2007 fiscal year budget that is to begin on Dec. 1, 2006. The budget discussion was postponed until officials could sort through problems getting their audit completed and determine if they were required to pass a budget, and if not, what would be best to do.

The budget is normally created with an eye in view of confirmed audit figures from the previous year’s budget. This year budget would have been created looking at the 2005 audit of the 2004 budget. However, the 2005 audit is not back yet. So, the finance committee prepared the new budget based on the 2005 budget.

Discussions took place on how to get that audit done last week.

Last year the board was told that the States Attorney, Tim Huyett, had said that the county could continue to operate on the previous year’s budget if a new budget was not passed in time for the start of the new fiscal year; but nothing could be raised, lowered or added, it would all stay the same until a new budget was passed.

This year Huyett put it in the hands of assistant states attorney Jonathan Wright to research. Wright advised the board that it was his interpretation of the Illinois statutes that the board needs to pass a budget in order to conduct business. The budget the board passed could then be amended up or down, as needed, during the year by a two-thirds vote of the board, Wright said.

Extrapolating the meaning of ‘conduct business’ would mean that they cannot make expenditures or receive revenues; the county could not write checks, payroll or otherwise.

Furthering that concept, board member Dick Logan said that he thought that they would not be able to receive revenue, such as taxes or fines either.
 
 While it was still a little unclear which interpretation of the law is was more correct, it was decided to follow the legally safer path. Finance chairman Chuck Ruben opened discussion of the proposed 2006-2007 fiscal year budget.
 
 Some departments are not actually run by the county and have separate operations and accounting, but the county receives funding for them into the general fund to be moved to special accounts or funds. Emergency management and the health department are examples of this. The manner of recording those funds varies and can be complicated. It takes some creative accounting to deal with some of this according to several experts that have visited lately.
 
 This appears to be the main part of the problem with the current audit. Another problem appears to have been the timing of closing out the year and the way fund balances rolled forward, Lascody said after last night’s meeting.
 
Another problem is that it has resulted in negative balances in some accounts. This has occurred for various reasons, some because of the way grants come in and go into the general fund. Then the money is transferred from the general fund to a specific account, but how to do that and how it is recorded differs.

 The finance committee began clearing most of the negative fund balances up last year. No money was actually owed to any of these accounts, finance chairman Chuck Ruben said.
 
 The remaining several accounts are being zeroed out to start this new fiscal year.
 This included nearly $62,000 in the animal control fund, $155,000 in Emergency Management Agency fund and a couple of other funds.

 The budget that was made last year anticipated a zero balance at the end of this year.
 
 The audit is normally used to help make financial decisions during the year, but with that not available this year some committee chairmen and county departments held back on spending. Representatives that have been present at meetings from buildings and grounds, the highway department, the sheriff’s department and other county divisions have said at various times this year that they held down expenses while going through this difficult financial time.
 
 There may have been more revenues than anticipated that came in also. It is not known exactly why, but the end of year 2006 appears to be coming in with about a half million dollars surplus.
 
 However, the good news was short lived. After zeroing out the negative balances this starts the new fiscal year down nearly a half million dollars.
 
 
 There were several requests to roll over the funds that were not spent last year into the account budgets for this year. Then when the audit is back and there is a better look at where the finances really stand they might be used. An example of this was presented by buildings and grounds chair John Stewart. He held back work projects that still need doing.
 
 County employee salary increases using the Consumer Price Index of 3.4% for cost of living were approved. The county has the right to not increase salaries, but it was pointed out that county employees took a hit in increased health coverage costs this year because of the tight budget concerns.

 
 Andy Lascody from Sikisch and Gardner has and continues to serve the county as a consultant in creating new budgets and in bidding out the audit on a three-year contract.
 At his direction the roughly $5 million new budget has been developed using conservative revenue expectations and accurate expenditures.
 
 The board approved the draft of the 2006-2007 fiscal year budget with only Stewart voting ‘no’.
 
 The county has hired Lascody to assist in getting the figures sorted out and the new audit completed. He said that they will have representatives come in to the departments and research the county books to see where the problem with the figures might be. He will make a proposal of what it will cost to help fix them.
 
 This is the final year of the contract with the current auditor.
 
 Another thing was discovered while looking into the Illinois regulations; it used to be thought that the budget had to be on public display for 30-days. It only needs to be posted for 15-days. Once the revisions that were decided last night are made a copy of the budget will go on display at the Logan County Courthouse.
 
 The new budget goes to the board for final approval at their Nov. 21 meeting at 7 p.m.. It will be discussed at the meeting prior on Nov. 16. at 7 p.m. Both meetings take place in the Logan County Courthouse.
 
 [Jan Youngquist]