WINNSBORO – Fairfield County did well managing its finances following the nuclear plant and hospital closings, but faced challenges over rising retirement costs, the county’s annual audit states.
“In our opinion we think the county is in good financial position as of June 30, 2018,” said Brian D’Amico, an auditor with Elliott Davis, at Monday night’s Fairfield County Council meeting.
The 2018 audit found no material weaknesses, though it did list a “significant deficiency,” a less severe rating.
Specifically, the audit said the Fairfield County Family Court and Treasurer’s Office didn’t “perform timely preparation and review of the reconciliation of bank accounts held by the County.”
Fairfield County outsources the preparation of bank account reconciliations to a third party service for some accounts, according to the audit.
But there aren’t any policies to ensure reconciliations are handled in a timely manner, the audit states.
As a result, the county exposes itself to increased “risk of not identifying potential fraud or material errors in a timely manner,” the report continues.
The audit recommends that the county establish a formal policy to review bank statements in a timely manner, and also that it reviews third party services.
“This issue has been discussed with the third party service provider. If improvement is not made, the Clerk of Court will consider changing providers,” the auditor stated.
“Moving forward, the Treasurer’s Office will implement policies and procedures to timely receive and review all bank reconciliations,” the audit continued.
Councilman Jimmy Ray Douglas expressed frustration that copies of the audit hadn’t been circulated sooner to council members.
“I would suggest we get this information before he [the auditor] comes up to speak,” Douglas said. “We haven’t had a chance to look at this information. I would’ve liked to look at it first before he made his talk.”
Council members didn’t discuss the significant deficiency designation during the meeting. Councilman Moses Bell, though, asked D’Amico what the county was doing right and wrong.
D’Amico responded that the county did a great job managing finances after construction ended on nuclear reactors at the VC Summer nuclear plant. He also commended officials for how they handled the closure of Fairfield Memorial Hospital.
Last summer, the county purchased several parcels of the former hospital property for $1.3 million, with an option to acquire the rehabilitation center for an additional $285,000.
The intent was to preserve the properties long enough to find a private buyer willing to purchase them.
On Monday night, council members voted unanimously to approve a sales listing agreement for the properties. County attorney Tommy Morgan said it’s too soon to say when the county would formally list the properties.
In addition to the significant deficiency rating, the county weathered some increased costs and decreased revenues, largely due to escalating retirement costs.
D’Amico said changes in accounting standards in how Other Post Employment Benefits are calculated caused OPEB liabilities to climb from $2 million to nearly $4.9 million.
In addition, net pension liabilities rose from $23.1 million to $25.2 million.
“That number is out of your control,” D’Amico said of the net pension liability. “That number is dictated based on South Carolina retirement system and police officer retirement system, and that is controlled by the legislation of the state.”
Fairfield’s general fund balance also shed $400,000 as of June 30, 2018, falling to $21.5 million. About $13.2 million of that amount is designated as “unassigned,” according to the audit.
“That money can be spent in any way council sees fit,” D’Amico said.
Fairfield currently has enough in reserve to cover about 5 ½ months of expenses. Last year at this time, the county had seven months in reserve funds available, D’Amico said.