Lake County finance director outlines budget process, fund structure and new controls

Lake County's new finance director gave commissioners a detailed briefing on how the county develops, adopts and amends its budget, the county's 30 funds and recent steps to tighten internal controls.

"Colorado counties, their budget process is governed by CRS, which is Colorado Revised Statute Title 29 Article 1, and it requires that we adopt a balanced budget," Candace Bryant, Lake County's finance director, told the Board of County Commissioners during the work session. Bryant said the county must adopt a balanced budget before levying taxes and that the Department of Local Affairs (DOLA) reviews submitted budgets for compliance.

Why it matters: The session laid out statutory deadlines, the county's fiscal calendar and how staff plan to reduce audit risk by centralizing grant tracking, enforcing monthly reconciliations and tightening purchasing-card (p-card) controls. Several items discussed affect how much money the county can legally obligate, where revenue flows must be recorded and the runway the county would have to respond to a major revenue loss such as a mine closure.

Key points from the presentation

Budget process and calendar: Bryant and County Manager Tim said the process begins early and builds from department requests, midyear guidance and valuation data from the assessor. Tim said preliminary valuation numbers arrive in August and staff use those to model mill-levy scenarios. The county must present a proposed budget to the governing body before Oct. 15, certify mill levies by Dec. 15, certify levies to the assessor by Dec. 22 and adopt a final budget by Dec. 31; Lake County must file the approved budget with DOLA by Jan. 31.

Fund accounting and major funds: Lake County maintains roughly 30 funds, split between restricted and unrestricted accounts. Bryant summarized key statutory and special funds: - General Fund: primary operating fund funded largely by property tax and sales tax; staff and elected offices are paid from it. - Road and Bridge Fund, Public Health Fund, Human Services Fund: statutory, restricted funds governed by Colorado revised statutes for specific program purposes. - Enterprise funds: airport, landfill and a Lake County water project enterprise that operate more like self-supporting businesses. - Special and voter-approved funds: the mine-closure fund (created by ballot measure 1B), a blood-lead monitoring fund funded by an Asarco trust, and a lodging/accommodations tax increase adopted by ballot measure 2A (which raised the city component from 1.92% to 4.92%; the tourism panel receives 1.92% and the county's regional housing authority receives the remainder).

Certificate of Participation and courthouse project: Bryant told the board that the county issued certificates of participation (COPs) to fund courthouse renovations and that the COP issuance was for $8,000,000 to pay for the project. She said DOLA now requires supplemental schedules describing planned debt payments and large expenditures when counties submit budgets.

Audit findings and internal controls: Bryant and other staff reviewed issues raised in the county's recent audit. The central audit concerns were inconsistent grant tracking and monthly bank reconciliations across offices rather than evidence of theft. Bryant said the county historically lacked centralized grant tracking and monthly reconciliation in the treasurer's office and that those gaps made it difficult to tie grant reimbursements and receivables to the correct funds during the audit. She said the finance office is working with an outside CPA and the treasurer's office to ensure timely monthly reconciliations.

"Because of the separation of duties, the treasurer is the recipient of funds, not accounting; that protects against fraud," Bryant said, adding that the county must improve the flow of information so finance can reconcile to the treasurer's reconciliations each month.

Procurement, p-card and grants policies: Bryant summarized new or revised policies posted on the county website: - Procurement and contracts policy: authorization thresholds and procedures intended to ensure transparent, equitable purchasing. - Purchasing-card (p-card) policy: standard card limits, reconciliation deadlines and discipline for noncompliance. Bryant said the county has reduced outstanding p-cards from about 125 to 85 and that p-card transactions must be coded and submitted for verification by the 5th of each month. Cardholders face an initial warning, then suspension, for repeated failures to comply. - Grants policy: requires departments to notify finance and the manager before applying for grants, route award documents to the county attorney and finance, and confirm staffing or match commitments before acceptance.

Reserves and contingency: The county's general-fund contingency target is 10% of general fund operating revenues (excluding one-time transfers). Bryant described the mine-closure fund as a budget stabilization reserve established by ballot measure for a severe valuation decline and said its balance is generating interest; staff estimated it at roughly $3.5 million.

Operational changes and staffing: Commissioners asked where the county has reduced outside professional services by building in-house capacity. Bryant and other staff said hiring dedicated water staff, a planner and expanded IT and finance capacity has reduced reliance on outside consultants in areas such as water law, planning reviews and IT maintenance. They cited plans to hire a local building inspector to keep permit revenue local rather than paying a large share to an external vendor.

Revenue context: Bryant and Tim gave recent revenue examples: the county estimated lodging and sales tax receipts conservatively for budgeting. For 2024 they budgeted about $5.8 million in sales tax but actuals were about $6.0 million; 2025 estimates were more conservative (about $5.5 million). Property tax remains the largest revenue source (roughly three-quarters of the general fund revenues cited): staff said the county receives roughly $14.5 million in property tax and that the largest mine account contributes about $4'to $5 million of that total.

Next steps and board directions

Staff said they will: - Continue to centralize grant tracking and route award/acceptance letters to finance and the county attorney before accepting grants. - Strengthen monthly reconciliation procedures between the treasurer and finance office using outside CPA training and internal process changes. - Enforce p-card reconciliation deadlines and limit increases on a temporary, documented basis. - Continue quarterly supplemental budget cycles and present clear 'from/to' language on any proposed budget amendments so finance can update ledgers without follow-up research.

There were no formal votes during the work session.

Ending

Bryant and operations staff emphasized that the new policies are intended to create a clearer audit trail and make monthly financial reporting reliable and searchable on DOLA's portal and the county website. The presentation materials, finance staff said, will be posted under the commissioners' onboarding (County Government 101) page so the public and future staff can locate budget books, supplemental filings and policy documents.

Commissioners requested a follow-up session to craft public-facing language explaining past shortcomings, the corrective steps the county is taking and how those changes will protect taxpayers and grantors.