Putnam County auditors report $31.8M 2023 surplus, strong reserves and GFOA recognition

Putnam County's outside auditors told the Audit & Administration Committee on Sept. 24, 2024, that the county closed fiscal 2023 with an estimated $31.8 million positive change in fund balance and a total general fund balance of about $144.3 million, and that the county continues to meet high standards for financial reporting.

Nicholas DeSantis, a partner with PKF O'Connor Davies, said in the committee presentation that the county's financial statements were issued as draft with a clean opinion expected and that Putnam had again received the Government Finance Officers Association certificate of achievement for excellence in financial reporting. "I believe this is the 37th award that the county has gotten," DeSantis said during the presentation.

Auditors and county finance staff attributed the surplus to several factors. Alan, the on-site auditor, summarized the budget-to-actual results: actual revenues were about $184,213,000, producing a negative variance of roughly $5 million against the final budget, while expenditures came in significantly below the final budget (about $147,000,000), creating the net positive variance. Sales-tax growth and higher interest earnings were the largest revenue contributors, and auditors reported an increase in sales tax of approximately $6 million from 2022 and materially higher interest income.

The auditors emphasized that one notable timing item reduced recognized revenue in 2023: unspent federal aid, including ARPA funds, is recorded as revenue only when expended. DeSantis told the committee, "any ARPA funds that are remaining have to be encumbered by the end of 24 and have to be expended by the end of 26; otherwise, you're going to send it back to the federal government." When that timing is adjusted out, auditors said the county had almost $12.8 million of positive variance on the revenue side other than ARPA.

The presentation broke the fund balance into standard categories (nonspendable, restricted, assigned and unassigned). Auditors noted specific assigned reserves for retirement ($5.2 million), future capital projects ($7.5 million and additional set-asides) and other items such as tax stabilization and insurance. DeSantis also noted Putnam County's Aa1 rating from Moody's as evidence of a strong fiscal position.

Committee members pressed auditors and staff on interest-rate sensitivity and investment strategy. Auditors said Putnam County uses laddered fixed-income investments and had taken advantage of higher rates in 2023; they described the county's interest budget as conservative, which reduces near-term budget risk if market rates change.

The auditors left printed financial statements and a PowerPoint with the committee and offered to take follow-up questions; the transcript contains no formal committee vote to accept the audit report at this meeting. DeSantis and his colleague offered contact information for further questions. "If anyone has any questions, feel free to call us," he said.

What happens next: the committee continued into routine correspondence and a set of budget transfers and personnel items, which it forwarded to the full legislature for final action.