Polk County auditors deliver clean opinion; commissioners accept audit unanimously

Polk County commissioners accepted the county's fiscal year 2024 audit after auditors told the board they had issued an unmodified opinion on the county's financial statements for the year ended June 30, 2024.

The auditors reported the county had total assets and deferred outflows of $130,500,000 and liabilities and deferred inflows of $73,300,000, leaving a net position of $57,200,000 — an increase of $11,400,000 from the prior year. Countywide governmental fund revenue totaled $84,200,000 and expenditures totaled $84,500,000, leaving combined ending fund balances of $32,300,000. Major components of the ending fund balances included the general fund ($6,500,000), public works ($4,100,000) and behavioral health ($18,500,000).

The auditors also highlighted Polk County's share of the Oregon Public Employees Retirement System (PERS) net pension liability as a significant factor affecting net position. The county's total net pension liability was reported as $44,000,000, measured as of June 30, 2023, with an increase of $11,400,000 in the most recent measurement year. The auditors noted current county contributions amount to about 23.96 cents for every dollar of payroll subject to PERS.

Auditors raised one accounting adjustment from the prior year related to opioid settlement proceeds. While pharmaceutical manufacturers have agreed to multi-year payments to federal and local governments, the auditors said the county did not book a receivable because the expected future payments carry substantial uncertainty and extend into the 2030s. "I'm not betting now. I don't know what's gonna happen in the next 10 years," said Brad Bagenheimer, the lead auditor, describing risks such as bankruptcy or other legal developments that could affect future payments. At the fund level, the auditors said any such settlement would have been recorded as unearned revenue and would not affect fund balances.

Kathy Wilson, who presented federal- and state-compliance work, told the board auditors found no findings in the federal compliance review. The auditors did identify several budget-related findings for the county's state compliance report: overexpenditures of appropriations in several funds (behavioral health, law library, fair management services and insurance) and a change in the domestic mediation fund that exceeded approved budget thresholds without a supplemental budget.

The auditors provided the county and the Polk County Extension Service District with a combined audit letter; they said Oregon law requires a separate report for component units of the county and that the extension district's financials are treated as a blended component unit in the county audit.

After the presentation, a commissioner moved to accept the audit as presented and the board voted unanimously to approve the audit.

Votes at a glance: approval of the agenda, approval of the January 29 minutes, approval of the consent calendar and acceptance of the audit all passed unanimously during the meeting.