An audit report presented last week revealed no significant issues with Zebulon’s bookkeeping for the 2014 fiscal year.
On paper, it appears the town witnessed a 6.8 percent increase its savings from 2013 to 2014 – from $6,809,000 as of June 30, 2013, to $7,260,000 as of the same date this year. That information is deceiving, however, since the fund balance increased mostly because of a $460,635 loan the town obtained to finance capital projects over a span of 10 years.
Strictly looking at revenues versus expenditures, taking the loan out of the picture, the town came in $40,425 over budget for the 2014 year. That was only a fraction of the amount the town’s spending increased from 2013 ($7.1 million) to 2014 ($7.7 million).
Zebulon expected to spend $647,149 of its fund balance in 2014 but largely managed to avoid dipping into its savings, said Finance Director Bobby Fitts.
“That’s always a good thing,” Fitts said. “We’ve only had to use appropriated fund balance a couple times in the last 10 years.”
Helping make that possible for 2014 were under-budget expenses, over-budget revenues (like sales tax) and the sale of two downtown surplus buildings for a combined $223,000 that was not included in the budget.
Zebulon also decreased its debt by $580,855 during the 2014 year.
The town ended the year with an unassigned fund balance equal to 70 percent of its general fund expenses. Town policy requires Zebulon to keep at least 50 percent of a year’s operating expenses in savings.
“It shows a strong unit of government,” Fitts said of holding well more than the town’s minimum required fund balance. “It’s good when you go for your bond rating to have a strong fund balance. When you go to issue debt you get a better interest rate, and interest rates are low right now but the more fund balance you have the more interest you earn.”
The auditors found two areas where improvement would be desired – similar findings to those reported in last year’s audit.
They noted two instances where charges were made by employees not included on the town’s credit card use authorization form. Fitts said the employees actually are on the list, but that their signatures for the charges made were illegible.
Regardless, the accountants recommended updating the list of employees authorized to make credit card charges. They also suggested reviewing the town’s policy on open vendor accounts, requiring signatures on all receipts, and having department heads review and authorize the accounts monthly.
There was also one instance in which payments were made to vendors where there was no approved purchase order in place. The recommended fix was that town staff be reminded of proper purchasing procedures, and that any deviation from the policy should be followed up on a case-by-case basis.
Fitts said the town has already started using the forms for purchases approved by the town board.
Zebulon received the Certificate of Achievement of Excellence in Financial Reporting from the Government Officer’s Association for its 2013 comprehensive annual financial report. It marked the 21st year in a row the town has received the honor.