Custer County finance director flags insurance coding, front‑loaded costs and capital fund risks in first‑quarter review

Custer County commissioners and staff reviewed the county’s first‑quarter financials on April 24, 2025, and Finance Director Vernon Roth flagged a set of items staff will investigate to avoid mid‑year shortfalls. Roth said he had provided commissioners “a copy of all the active funds” and “gone through and highlighted anything that is over a 25%” threshold for the three months of January through March.

The review showed a mix of expected “front‑year” payments and apparent coding or payroll problems that push several department lines above the 25% rule-of-thumb for the quarter. The unaudited combined cash balance across county funds was reported as $8,736,191; year‑to‑date revenue was $3,037,000 against an expected $10,887,000 for the year.

Why it matters: several insurance and payroll lines appear higher than budgeted or inconsistently coded, which could require operational transfers, internal reclassifications or backfills at midyear. Commissioners directed staff to work with Human Resources and the auditors to reconcile those lines and to bring corrected figures to the midyear review.

Most important items noted

- Insurance and benefits: Multiple departments report insurance/benefits lines materially above planned levels. Roth repeatedly said he will “investigate this with HR” and recommended an audit of open‑enrollment results and payroll coding to confirm who is enrolled and how employer contributions were calculated. Commissioners raised concerns that some insurance entries may reflect post‑budget enrollment changes.

- Front‑loaded, annual or one‑time payments: Several large percentages reflect legitimate early‑year payments, not overuse. Examples Roth cited included annual software and data‑processing contracts (payments to vendors such as Esri, Tyler, Omnigos were identified as front‑year charges), an annual body‑camera fee of roughly $32,000, and other vendor invoices that are paid at the start of the fiscal year and cover the full year.

- Grants and payroll charging: Roth described adjustments to how salaried employees are charged when grant funds are used. He said HR corrected prior mischarging of salaried employees as hourly and that some staff will now split hours among county and grant funds so grant admin dollars can contribute toward salaries. He noted that these changes required internal adjustments to salary and benefit lines.

- Capital and 50‑fund risks: Commissioners focused on the 50 (capital) fund. Roth said the 50‑fund shows $715,000 in budgeted expenditures to date, $315,000 spent and a cash balance of about $513,000. He warned the board that the county will need to discuss funding for landfill closure, citing a prior estimate in the meeting notes of about $1.2 million to close the landfill. Roth said those commitments and reserve needs mean the county “can’t be playing with that very much.”

- Equipment and capital purchases: Road and Bridge purchases contributed to capital totals. Commissioners and staff referenced recent purchases including a drum roller (approximately $68,000) and a trailer (about $23,000). Roth said principal and interest payments tied to road grader purchases appear on debt‑service lines and will be reconciled with auditors.

- Specific department pressures: Roth highlighted jail medical at $13,500 year‑to‑date on a $7,000 budgeted line and noted food and utilities pressures at the jail and landfill (landfill public utilities at high percentages driven by electricity and propane). Recycling revenues were noted as favorable (about 70% of expected revenue early in the year). He also flagged vehicle upfitting and overtime in patrol as items to watch.

- Sales tax / revenue coding question: Commissioners asked about a large “sales tax and commission” line that did not match on‑hand expectations; Roth said he would research whether sales tax receipts had been miscoded or placed in the wrong account and bring a corrected page at the next review.

Project updates and grants

- CIPA digitization project: Roth described the county’s participation in CIPA (a statewide internet‑portal grant) to digitize planning and zoning records and assign them to parcels. He said two part‑time grant‑funded staff are ahead of schedule, that a dedicated scanner was purchased with grant funds, and that the portal work will make property permit history searchable for the public.

Staff directions and next steps

Commissioners instructed staff to: - Work with HR and auditors to reconcile insurance enrollments and benefit charges (including auditing open‑enrollment results and any late enrollments that affected the budget); - Reclassify miscoded salary and expense lines via operational transfers (credit/debit) when appropriate; - Investigate high insurance lines, professional‑services charges and any unusually large vendor invoices; - Report back at a midyear review with department heads and elected officials present so everyone hears cross‑department pressures and can agree on any proposed transfers or supplemental requests.

Commission discussion included process and transparency concerns. One commissioner reminded the board, “These budget reviews are very important. Quarterly, we are we are looking at it quarterly. We agreed to do that as a process.”

What was not decided

There were no formal motions or votes recorded during the session. Commissioners asked for follow‑up reports and internal corrections rather than adopting policy changes or approving supplemental appropriations at the meeting.

Looking ahead

Roth and commissioners set a midyear review and directed departments to prepare detailed backup for any lines over the threshold. Roth said auditors and accounting staff will perform adjustments before final audited results and that corrected figures will be presented at future sessions.