County audit gives praise, recommendations
As business enterprises go, Hubbard County's is a significant part of the local economy. And county leaders are taking seriously their role to safeguard the county's assets, an independent audit recently concluded.
"The total net assets of governmental activities are $67,775,377, of which $49,900,977 is invested in capital assets, net of related debt, $4,283,441 is restricted for specific purposes, and $13,590,959 is unrestricted... Total net assets of governmental activities increased by $140,000 for the year" primarily due to vehicle and equipment purchases.
That was the finding of the financial audit conducted for the fiscal year ending Dec. 31, 2008. The auditor also examined financial statements of Heritage Living Center and Heritage Manor through Sept. 30, 2008.
The audit expresses no opinion as to the state of the county's health except to say it follows generally accepted accounting practices.
Although the audit generally had high praise for County Auditor Pam Heeren and her staff, it did make some recommendations to safeguard county finances in the future.
"Every dime you have on hand is designated for something," auditor Colleen Hoffman told the board.
"The room is full of lists," county board chair Lyle Robinson responded.
Hoffman said Hubbard County is "very low risk when it comes to management of big expenses" due to internal controls and segregation of duties.
But because the combined auditor/treasurer's department is small, the auditor said "concentration of duties and responsibilities in a limited number of individuals is not desirable from an accounting point of view."
It is something Heeren and the staff will address, implementing oversight procedures, the audit response stated.
And the audit recommended keeping one central ledger, rather than having the highway and social services departments separate. The county will work to consolidate all the ledgers by 2010.
An adjustment to the general ledger of more than $1,100 had to be made during the audit to balance the ledger with the cash on hand and an investigation is under way to determine why the two didn't reconcile.
The audit did indicate Hubbard County's business-type activities had decreased by $137,566 in 2008, largely due to "resident service losses and decreased ancillary revenues," the audit concluded.
Fees, charges, fines and other charges comprise 36.5 percent of county revenues. Taxes are nearly 30 percent. Grant moneys and contributions make up the remainder of the lion's share of county revenues at nearly 19 percent. In 2008 the county received $2.2 million in federal awards, auditor Colleen Hoffman told the commission.
Human services account for 24 percent of those revenues; the highway department accounts for nearly 18 percent; Heritage Living Center and Manor spend more than 15 percent of the revenues, public safety spends 14 percent and general government accounts for nearly 13 percent of the expenses. Other governmental operations make up the remainder of the expenses.
Per capita for Hubbard County's population of 18,810, human services spends $436; highways and streets spends $324; Heritage and the Manor spend $279; public safety spends $256; general government spends $230 and sanitation spends $140. Lesser governmental functions comprise the remainder $150.
The county's $8.9 million general fund, the main operating fund, decreased by $607,468 "due to the planned spend-down of reserves," the audit said.
Declining timber sales revenues impacted the county by a minus $187,509 "due to the economic turndown and slow housing market."
Heritage Living Center "reported an operating loss in 2008 of $172,634, as a result of occupancy of 87.9 percent in 2008 down from 95.3 percent in 2007," the report stated.
However, Friends of Heritage have raised $100,000 and will be presenting the county a check at its Oct. 21 meeting. And the Heritage Manor Enterprise Fund "reported an operating income of $140,282, primarily due to full occupancy in 2008," the report stated.
In 2008, the audit found, overall revenues were $102,861 over budgeted amounts, while expenditures were $168,972 less than budgeted.
Robinson jokingly claimed credit for the county's good financial health, maintaining because he'd cracked the whip over the county department heads, they responded favorably. A hiring freeze enacted in February 2009 and spending restrictions should keep the county's finances in continued good order, the county board reasoned at last week's meeting.
The county's total debt of $13,942,379 is below the 3 percent debt limit of its total market value allowed under Minnesota statutes. It excludes any revenue bonds. The county's Moody's rating is Aaa, considered in investment circles to be the highest quality with the lowest degree of risk.
"For the fourth consecutive year, the Hubbard County Board of Commissioners has set their levy below or at maximum allowed to avoid a Truth in Taxation meeting," the audit report states. "This shows that not only is Hubbard County holding their levy increases at reasonable levels but saving the expenses of holding a Truth in Taxation meeting, where few, if any, taxpayers attend."
Finally, the audit concluded: "The Hubbard County Board of Commissioners, elected officials and their department managers take very seriously the spending of taxpayer dollars. The departments have reduced their spending as much as possible while still providing the mandatory services to the taxpayers."