• While the auditors gave the county an okay report, the documents revealed the unreserved fund balance had dropped from about $6.3 million in June 2005 to slightly less than $4.3 million as of June 30, 2006.

By NICOLE CARTRETTE
Staff Writer

It’s not a mystery anymore. An unknown fund balance that left commissioners playing chance with dipping into it to balance the budget for fiscal 2006-2007 was at its minimum in June 2006.

The state’s Local Government Commission suggests that a mini-mum of 8 percent of the prior year’s expenditures be on hand for governments and that is what Columbus County had –just eight percent.

According to the 2006 audit prepared by Thompson, Price, Scott, Adams and Co., a local accounting firm, the county’s unreserved fund balance was $4,260,869 or 8 percent of the total general fund expenditures for the fiscal year.

About $1.7 million had been used for the Williams School project and has since been replaced with capital project fund loan monies.

The fund was down more than $2 million from the previous year when the county’s unreserved general fund was more than $6.2 million and at 12 percent of the total general fund expenditures for the fiscal year.

The percentage on hand affects local government’s financial ratings and its ability to borrow money. Had the county dipped further into the undesignated fund balance in June while trying to balance the budget, it would have dropped below the minimum requirement.

In 2003 the fund balance available totaled about $12.3 million and has declined each year following. In recent years, county government has pulled from the fund to balance the budget each year in June.

The county keeps an A credit rating. Creditworthiness is based on bond ratings. Higher ratings result in lower interest rates secured for borrowing. Ratings range from AAA (triple A) to C or D for securities locked in default.

In June, the county faced a budget dilemma when County Manager Jim Varner pointed out that the county’s financial books had not been reconciled since September 2005. The undesignated fund balance could not be determined, and some commissioners speculated that taking from it was risky.

The total revenues to the entire general fund as of June 30, 2006 were about $55.4 million. The county spent about $54.3, compared with 2005 when the general fund revenue was $51.5 million and expenditures were about $53.5.

The county’s overall debt decreased by about $2.8 million, pri-marily because of principal payments on general obligation. As of June 30, 2006 the county had total bonded debt outstanding of about $17.4 million and installment obligations of roughly $11.6 million.