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By Carey King
Sylva's auditors have given the town a clean bill of financial
health.
"When the unexpected comes along, they can deal with it,"
said Mitch Crisp, certified public accountant at Crisp Evans Hughes
LLP.
Sylva finance committee - board members Anne Cabe and Eldridge
Painter - met with Crisp and town Manager Richard McHargue Dec.
10 to review Sylva's finances.
Undesignated funds increased as percentage of the town's total
operational budget, which means the town has more "money
to pull from at the end of the day," McHargue said.
"Undesignated funds are in reality capital improvement funds,
in addition to being the only source of funding during a significant
emergency," he said. "Last year, (undesignated funds)
were 19 percent of our $1.8 million budget. This year, our operating
budget is just over $2 million. (Our undesignated fund percentage)
rose to 28 or 29 percent."
The increase means that Sylva is "on the right track for
preparing to do necessary repairs for streets, sidewalks, the
things people demand," McHargue said.
Town leaders were glad to see the increase after being notified
four years ago by the Local Government Commission that Sylva's
fund balance was too low. Though the total fund balance actually
decreased this year, the rise in the undesignated fund balance
was good news.
Town board members have made increasing the fund balance one of
their main goals, McHargue said.
Auditors found two flaws in Sylva's finances, but Crisp said those
two problems were no more than "minor points, more housekeeping
than anything. We just put it out there on paper to say that we're
all aware of it."
The first difficulty - the inability of the town's three
office staff to implement a full system of financial checks and
balances - is a problem auditors find every year because Sylva
is small, McHargue said.
"We maximize the use of the people we've got to sign off
on checks, purchase orders and bank statements.
There's nothing we can do to separate (the duties) unless we get
big enough to have a separate finance department. Basically, all
of us are holding down two or three jobs," McHargue said.
Inability to segregate duties is not a reportable violation, but
remains a weakness for the town since it increases the chances
that financial mistakes go undetected, Crisp said.
The other problem auditors noted was the budgeting method for
one of the town's 11 special revenue funds.
The Urban Development Action Grant fund, used to make economic
development grants to organizations such as Sylva Partners in
Renewal and the Jackson County Economic Development Commission,
has been difficult to monitor because of its project-based method
of appropriations, McHargue said.
Crisp recommended that town leaders convert the UDAG fund to an
annual-appropriation format, making it easier to administer and
easier for the public to understand.
Changing the UDAG fund to a yearly cycle fits in with the forward
planning town leaders did when they adopted a Capital Improvement
Plan in July, McHargue said.
"We know at the start of the year what's coming ahead more
than we used to," he said.
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