Dear Editor,
I recently stated there was no deficit in the County Finances for 2024. It was good that the County acknowledged that fact shortly after I disclosed that in early April. Further, I was pleased to see the 2024-2025 Budget proposal by Sam Elters and Luke Mournian, specifically acknowledged their commitment to the GFOA’s “Fund Balance Guidelines for the General Fund”; which I first shared then Finance Director Coral Loyd in 2015. It led to the County adopting their first Fund Balance Policy in 2016.
However, there is a “deficit” in the County’s reporting practices. That is not my opinion; rather it’s based the Government Finance Officers Association (GFOA) recommendation.
Their Fund Balance Guidelines makes several solid recommendations. But there’s a part of the policy that I missed until recently. The GFOA notes that the term, “fund balance” is used for both GAAP reporting and a government’s budget. The term means essentially the same whether in Financial Reporting or in the Budgetary Reporting. However, the crucial difference between the two: that is the use of General Fund “Sub-Funds.” This is the GFOA statement regarding that difference:
“The calculation of GAAP fund balance and budgetary fund balance sometimes is complicated by the use of sub-funds within the general fund. In such cases, GAAP fund balance includes amounts from all of the sub-funds, whereas budgetary fund balance typically does not.”
That means the GFOA strongly advises that the General Fund balance should include all General Fund sub-funds in their Annual Financial Report. Mohave County has MANY! While numerous funds are restricted; most are not. For example, the following sub-funds: Health Insurance, Self-Retention Trust, Vehicle Replacement, Information Services, Planning/Zoning & Building Inspection IT, P&Z Building Abatement, Election Equipment Replacement, the Development Service Nuisance Abatement, ERACE, Capital Project, and the Grandaddy of these sub-funds: Capital Improvement Fund, are all listed in the Monthly Treasurer’s Report. The total cash in ALL these funds, as of March 31st, was $56 Million, more than the 2023 audit’s General Fund Balance $50.5 Million. But that same March 2024 Treasurer’s Report shows a whopping $67 Million in the General Fund, NOT COUNTING all the sub-funds. The conservative estimate is over $100 Million in the General Fund, when you add these sub-funds. That is much more than the County reported. Perhaps that’s why they now admit there’s no deficit.
That is not the only issue regarding the GFOA’s recommendations. Instead, the there’s another issue that the County has ignored for nearly a quarter century. The County used to prepare, and publish what is called the “Annual Comprehensive Financial Report. The last ACFR produced by Mohave County was for 2001. The following is the GFOA’s policy statement regarding an Annual Comprehensive Financial Report (ACFR):
“The Government Finance Officers Association (GFOA) is on record recommending that ALL state and local governments prepare and publish an ACFR (Annual Comprehensive Financial Report). GFOA believes that the ACFR should be the normal means for a government to meet its financial reporting responsibilities.”
This means that, regardless of the size of the government, they should produce an Annual Comprehensive Financial Report, not simply an Annual Financial Report as the County currently prepares. You might ask “Why, what’s the difference?” It’s huge! With the ACFR, the County can finance their future obligations with tax-exempt bonds, which makes the cost much cheaper than taxable interest financing, including leases. You might ask, “Why shouldn’t we pay cash for our future needs?” The answer is obvious. The current citizens should NOT pay for future benefits of the citizens. The County’s “pay-as-you-go” policy of taxing the taxpayers today, for future needs is grossly unfair to today’s taxpayers!
I encourage the County to begin including sub-funds in their General Fund balance, and return to preparing Annual Comprehensive Financial Reports which they did through 2001., That will allow the County to finance needed development for the future citizens, with them paying for those benefits, NOT today’s citizen’s. BOTH are sensible propositions. So, ask your County Officials: do they believe they are? If not, why not?
Steven Robinson, Candidate for Mohave County District 4 Supervisor
