March 14, 2019 500 AM
PRESIDIO COUNTY – The Presidio County Commissioners’ Court last week heard the final report for the 2017 county fiscal audit, which revealed encouraging financial positions throughout, with some sincere concerns for the future. Doak Painter, CPA of Painter and Associates, presented a general fund in 2017 that saw $197,000 more in revenue than expected, while at the same time the county spent $294,000 less than had been budgeted for expenses. Overall, this created a positive budget variance of $492,000, but Painter forecasted trouble ahead if the county does not proceed with caution.
The county has fallen behind on audits, only hearing the 2017 audit now. At last week’s meeting, they also began soliciting bids for a new auditor for the 2018 audit that has not been started. Though Painter has worked with Presidio County since 2014 on audits, he and his firm refused County Judge Cindy Guevara’s plea to continue on for next year. In the final comments at Wednesday’s meeting, Guevara requested, “We want to ask you to keep auditing us,” but Painter firmly asserted he was ready to move on.
Painter, contacted after the meeting, said he had many concerns about the future of Presidio County. To start, he worries about “them getting rid of the Office of Management and Budget (OMB) department, and moving everything over to the county auditor.” Painter says having Presidio’s finances all controlled by one employee, County Auditor Patty Roach, puts “more risk on my side” to complete future audits. The OMB Office was abolished by the Commissioners Court in August of 2018, and Painter worries about completing an audit without them, especially as the county is beginning to receive more and more grant funding each year.
“They’ve got so much concentration of procedures in the county auditor’s office that if she were to go away, I would be stuck out there. Like what would I do? There’s so much historical knowledge there with her that my concern is, and I think Patty’s a good auditor, but when she retires, where’s the next person going to come from? Is the court looking long term at that, or just trying to take care of the issues now?”
Painter also bristled at the county’s decision to cut the OMB department as a cost saving measure, noting that they “then turned around and gave everybody raises.” Since 2014, he has been urging the county to instead hire a grant administrator, to lessen auditor Roach’s workload. He believes that if the county carved out money from grants to pay the salary for a Grant Administrator position, it would pay for itself. And, since it wouldn’t be an elected or appointed official, “there would be continuity with that person year, over year, over year.” A “single audit” was also a topic of discussion during the county meeting and after. Auditor Roach says the county may avoid having to complete a single audit for 2018, but 2019 is likely to require one. A single audit is triggered when a county expends $750,000 or more in federal grant award money in one year. Explaining, Painter said, “The single audit requires a regular audit, but then you have to go in and test major grant programs.” Because the county receives Stonegarden funding, Community Development Block Grants, and Routine Airport Maintenance Program (RAMP) grants, it is beginning to add up quickly.
According to the CPA, “The auditor is required to go in and test a set of 13 controls set by the government, and they’re like eligibility. Let’s say you’re doing a grant program for low income, for air conditioners or new stove for the elderly, then you would have to go in and test the eligibility of some of the recipients. That single audit requires test work that is specific to the control environment for that grant.”
On top a single audit looming in 2019, new Governmental Accounting Standards Board provisions will require a much tighter tracking of cash flow. Presidio County will now have to track things like every transaction in a prisoner’s commissary, and every time money is taken out of escrow. Painter added, “Currently I don’t think the county clerk, district clerk, or jail facilitator has that knowledge, so I think it’s one more thing the county auditor has to do.”
But despite future concerns, the 2017 audit showed positive outcomes across the balance sheets. The county was also able to build up a $151,000 debt service cash fund in 2017. That fund has since been depleted as the county has had to take out loans to match grant funding at the airport in 2018 and 2019. They also retired $252,000 in debt that year. The airport fund is a separate special revenue fund, but Painter reported the airport did a “good job” with a positive budget.
Across Texas, other cities are struggling to stay positive in their retirement funds, but Presidio has managed to stay financially stable, meaning they are on track to pay pensions and benefits for all their future retirees. “In bigger counties if there’s a net pension liability, you need a plan to make that up so that benefits will be available when people begin retiring in future years,” according to Painter. But, he notes that specifically along Highway 17, counties like Presidio are defying the common failures of retirement funds. “The good news is you have a net pension asset. It has to do with the robust economy here lately, and your investments are seeing appreciation.”
Justice of the Peace David Beebe also noted that the county has a low turnover rate for employees, which affects retirement funds in various positive ways. If employees stay on longer, there are fewer pensions to pay out come retirement time. County employees in Presidio also work later into their twilight years, meaning the pension won’t have to pay out as long.
In a previous meeting, Commissioners had requested the County Auditor investigate whether the county needed to go out for a forensic audit. At this meeting, Roach responded that her assessment is not yet completed and there is no estimated date of when it will be completed. It has been started.
As Painter completed his report to commissioners on the 2017 audit, Commissioners Eloy Aranda and Buddy Knight, along with Judge Guevara, the three in attendance at the meeting, each thanked Painter for his years with the county, and said it will be a loss to have him go.
After the meeting, Painter spoke to why the County is only now hearing the 2017 audit in 2019. “Just because I got the financial statements so late. I didn’t get the financial statements that could be audited until July of 2018, and then we had some issues with fixed assets so I gave them time to work that out, and got them finalized in mid-December of 2018.” Historically, the financial statements were delivered to Painter in April or May, meaning the county fell behind on their end
