KINGSTON � Ulster County Comptroller Elliot Auerbach last week released his office's quarterly report on the financial condition of the county during the fourth quarter of 2009.
The report is prefaced with complaints regarding the inefficiency of H.T.E., the county's "long-outdated" software system for managing its budget and financial data.
The problem, according to the report, stems from financial management software that "is unable to record and report essential data and information in a consistently reliable, accurate and useful manner," and is not a comment on the "very capable people," who waste "lots of time compensating for a poor system."
Signs of stress in the fiscal condition of the county are determined by the comptroller's office using four indicators, which include over-expended or over-encumbered appropriations, revenue shortfalls, cash flow deficits, and fund balance erosion or depletion.
The comptroller's report indicates that, over the course of 2009, budgeted expenditures increased almost 11 percent, which, when compared to the nearly 8 percent increase in 2008 and the 6 percent increase in 2007, reflects a "steady growth in expenditure increases over [the] budgeted expenditures for the three year period."
For the total budget, the report notes that revenues collected were 128 percent to 137 percent greater than were projected in the adopted budget.
"Due to the highly volatile economy," the comptroller recommended that the county's cash flow reports for all sources, including sales tax, mortgage tax receipts and interest income, be closely monitored. Cash-flow reports forecast short-term cash balances available for both operations and investment.
The Government Finance Officers Association recommends that the general fund unreserved fund balance consist of no less than 5 to 15 percent of regular general fund operating revenues. As such, the report notes that the reserved general fund balances "better meet the criteria than the unreserved general fund balances," but contends that both are "within the parameters." It also notes that there exists "a fair amount of fluctuation in percentage change from year to year" in the general fund balance.
Ulster County's 2010 budget analysis, conducted by the consulting firm of O'Connor, Davies, Munns & Dobbins, notes that the budget dips deeply into the fund balance in an effort to stave off a property tax increase. To balance this year's budget, $12.4 million will be drawn from the general fund balance � $5.4 million more than was used in the 2009 budget.
Auerbach's report recommends the county follow the guidelines proposed by the Government Accounting Standards Board in reporting the fund balance. The guidelines state that the fund report should distinguish "spendable and non-spendable portions," and that the non-spendable portions of fund balance be further divided into four parts � restricted, limited, assigned and unassigned � that correspond with the level of constraint placed on the purposes for which it may be used.
Overall, the comptroller's report urges that the county budget "be prepared in a format that facilitates year-to-year comparison."
In a separate matter, County Executive Mike Hein has tasked the comptroller's office with investigating how much the City of Kingston has overpaid the county in reimbursements for recipients of the Safety Net Program that were erroneously charged to the city.
Mandated by the state, the Safety Net program provides welfare benefits to individuals with no children and to those families exceeding the 60-month lifetime federal assistance limit. Per Ulster County's arrangement, the city and towns reimburse the county for one half of the benefits paid out.
Since discovering that the county had been inadvertently billing the city of Kingston for social services clients living outside the city, but within its zip code boundaries, Ulster County has instituted a new way of determining where welfare recipients live. Rather than using zip codes to determine reimbursement, the county is using its Real Property Tax Services property locator to verify the municipality of addresses given by clients enrolled in the program.