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Coconino County finance staff reports FY2024 unaudited results, warns of revenue-expenditure gap
Summary
Finance presenter Siri Malini told the Board of Supervisors that FY2024 unaudited statements show revenue growth lagging expenditure growth, ARPA funds near full expenditure, an audit delay after the Auditor General recusal, and long-term pension prepayment gains.
Siri Malini presented an unaudited fiscal-year-end financial update to the Coconino County Board of Supervisors on Dec. 10, saying the county’s FY2024 revenues rose about 2.4% while expenditures increased about 6.3%, and that the county expects an audit delay after the Auditor General’s office recusal.
"We were notified in October that due to a conflict of interest, the Auditor General's office would no longer be responsible for the Coconino County audit," Malini said, noting a new audit firm was assigned Nov. 12 and the county is roughly seven months behind a typical audit schedule. She said staff aim to work with the new firm to minimize the delay once field work begins in January.
Malini reviewed major funds: the general fund showed the planned use of $10,000,000 in fund balance aligned with adopted budgets and reserve policy; the Public Health Services District had 6.3% revenue growth and 7.9% expenditure growth and will continue to rely on general-fund supplemental support; and the jail district saw 4.6% revenue growth and 17.6% expenditure growth, driven by a shift to contracted medical services and a $3,000,000 intake-area capital redesign.
Transportation funds reflected a planned capital push, with Malini reporting a 63% increase in transportation expenditures tied to an aggressive capital program and a $12,500,000 use of fund balance to complete road projects. The Flood Control District spent about $42,000,000 in FY24, roughly $34.6 million of which came from federal and state grants, she said.
On federal pandemic-related dollars, Malini said the county received $27,850,000 under the State and Local Fiscal Recovery Fund (ARPA) and had expended about $27,560,000 by the end of Q1 FY25; she said the county expects to fully expend ARPA funds by the Dec. 31 deadline and will report project outcomes in next year’s budget process.
Malini described the county’s pension prepayment strategy: the county issued $53,000,000 of debt and invested those proceeds in the Arizona State Retirement System prepayment program, generating about $9,500,000 in investment earnings to date and netting roughly $4,650,000 above borrowing costs; she projected potential taxpayer savings of about $85,000,000 over 40 years from participating early in the program.
Board members asked for additional detail on Flood Control grant balances and long-term sustainability for programs started with one-time federal funds. Malini and other staff said they will provide more detailed reconciliations and a January status update for FY25 performance.
The presentation was labeled unaudited; the county expects a conventional audit schedule once the new audit firm begins work.
