Davenport tells Charles City supervisors fund balance has fallen sharply; residents press for forensic audit

Davenport public finance advisers told the Charles City County Board of Supervisors that the county's unassigned fund balance fell from about $10,000,000 at the end of fiscal 2021 to about $5,000,000 at the end of fiscal 2023 and that the county issued a $5,000,000 revenue anticipation note last year to manage cash needs.

The warning came during a presentation from David Rose of Davenport, who said the firm recommended securing an updated fiscal audit and producing a short-term cash-flow plan for banks so the county can arrange follow-up financing. "We need that '24 audit," Rose said, adding that banks will likely want a current audit and explanation before extending new short-term credit.

Why it matters: Davenport told the board the county used budgeted fund balance in FY2024 (about $1,600,000 budgeted use was cited), a practice the advisers said is not sustainable. Residents in a packed auditorium responded with repeated calls for transparency, an independent forensic audit and clearer explanations of how the county will repay the $5 million note due June 30.

Davenport presentation and recommendations

David Rose, who manages Davenport's public finance practice, and his partner Kyle Lauckx reviewed historical audited balances and current liquidity needs. Rose summarized audited balances as about $10,000,000 (FY2021), $8,000,000 (FY2022) and $5,000,000 (FY2023). He told the board the FY2024 budget included a planned use of approximately $1,600,000 in fund balance and stressed the county's need for an up-to-date FY2024 audit to clarify the current position.

Rose recommended: - Obtain and review the FY2024 audit as soon as possible. - Produce a monthly cash-flow projection of near-term inflows and outflows to use with lenders. - Recruit a permanent county administrator with strong finance experience. - Consider a forensic audit only after staff and a new administrator work through the audit findings and cannot explain material discrepancies.

Rose said an emergency one-year revenue anticipation note (RAN) issued last year (about $5,000,000 at a roughly 4.38% fixed rate) will come due June 30, and that securing follow-on borrowing will likely require the FY2024 audit and a credible plan.

Public comments and citizen demands

More than two dozen residents addressed the board in two public-comment periods. Common themes included requests for immediate, independent financial review, frustration with delayed audits, and concern about long-term consequences for county services and taxes.

Resident Doreen Billingsley said, "We have been begging for transparency and it has fallen on deaf ears," and urged the board to begin a forensic audit. Steve Hart, who said he works for neighboring Henrico County, asked whether Charles City had a balanced budget and whether county leaders were being transparent.

Several speakers linked long-running concerns about financial management to calls for accountability. Bill Hopkey noted audits had repeatedly cited material weaknesses in internal control and asked why those notes had not led to corrective action. "Now here we are trying to figure out how we can actually refund this revenue anticipation note," he said.

Board responses and next steps

County staff distributed an unaudited revenues-and-expenses report through February showing a gap in expected revenue collections; the finance director described the report as "unaudited" and said it would be updated monthly. County Administrator Mr. Warner and staff told the board they were pursuing the FY2024 audit and working to provide clearer monthly reports to supervisors and the public.

Davenport said it can help the county present finances to banks and recommended the board plan for a possible short-term financing solution after June 30 while pursuing longer-term fixes.

Votes at a glance

The meeting record included several formal motions and votes on routine and budget-related matters (all listed here as recorded motions followed by board outcome where available): - Motion to adopt the meeting agenda: passed (board recorded unanimous approval). - Motion to approve the consent agenda: passed (unanimous). - Motion to accept a $210 donation to Sheriff's Department: passed (unanimous). - Motion to accept a $500 donation for Fire & EMS: passed (unanimous). - Motion to accept a $50,000 Virginia Housing Community Impact Planning Grant: passed (unanimous). - Motion to approve a landfill-monitoring contract extension with Jacobs: passed (unanimous). - Motion to amend agreement to extend statutes of limitation and add an addendum to the waste-management contract (toll agreement): passed (unanimous). - Motion to defer action on a resolution concerning attorney costs until April: passed (unanimous).

What the record does not show

Davenport emphasized that the FY2024 audit is not yet complete and that the bank market will likely require a current audit to underwrite new short-term borrowing. County staff said the FY2024 audit is expected but did not provide a firm public completion date.

Ending

Supervisors said they will continue to press for the FY2024 audit and monthly unaudited financial updates, and Davenport said it will assist with short-term market outreach if requested. Meanwhile, residents continued to call for immediate independent review and clearer public disclosure of county finances.