SALISBURY – Officials received a positive report this week on the financial health of Wicomico County.
On Tuesday, representatives with PKS & Company presented the Wicomico County Council with a clean, unmodified audit report for fiscal year 2021.
“I’m happy to report our opinion on the county’s financial statements for the year ending June 30, 2021 is unmodified,” said Mike Kleger, partner at PKS. “This means the financial statements presented fairly the financial position of the county in accordance with generally accepted accounting principles. This is often referred to as a clean opinion and is the highest level of assurance we can provide as auditors.”
Kleger told county officials, however, that the audit did reveal two findings.
“We did not note any instances of noncompliance with laws and regulations, however, we did identify one material weakness and one significant deficiency …,” he explained. “Those two issues really related to accounts and bank reconciliations. Last year, I believe we ended up with five findings, so this year we are at two. We see that as a significant improvement.”
PKS Partner Ashley Stern noted the county reported an unrestricted net position totaling $37 million in 2021, representing a $10.5 million increase from the prior year.
Under the general fund, the county had an unassigned fund balance of more than $52 million. Revenues, she reported, increased by $12 million, while expenses increased by $228,000.
“There was an increase in our fund balance, or the health of the government or the county, of $12.6 million,” she said. “This was definitely a unique year with our COVID funding, grants that were able to cover certain expenditures.”
In 2021, actual revenues were $10.6 million greater than budgeted, and actual expenditures were $7 million less than budgeted.
“A lot of that has to do with timing, supply chain issues and personnel as far as staffing,” she explained.
Stern added that the county reported an increase in property tax revenues, as well as income tax revenues.
“From 2016 to 2021, they’ve increased by $11 million,” she said. “We’re actually seeing that across all governments with the income tax payouts.”
Councilman Joe Holloway questioned the $12 million increase to the general fund.
“How much of that $12 million is due to COVID funds?” he asked.
Stern noted that the county reported an $8 million increase in income tax, as well as a jump in recordation tax.
“The ARPA funds, which was received in May or June, are not recognized as revenue in these financial statements because they had not been spent as of June 30,” she replied. “But they will have an impact going forward.”
