COVINGTON, Ga. - The City of Covington received high marks on its 2017-2018 fiscal year audit during its March 5 council meeting.
Randy Smith, finance director, said the audit is required for the city by law and Miller Edwards, of Mauldin & Jenkins, has a five-year agreement to perform the audit. He said the city had a “very clean” audit.
“We don’t have any big issues that we need to report to you or any break down of controls, violation of laws or regulations. Everything is really running like it ought to,” he said. “It’s running really well.”
Edwards said the city is finically strong.
“Another great thing about the audit is how financially strong you all are,” he said. “We serve about 100 cities during the audit process, and about 350 total governments. This is definitely one of the top 5 percent, I would say, when it comes to looking at financial strength and wellbeing of the community. These financials look really good.
“I can’t say that enough. You are in great shape. Nothing to sit here and worry about, as far as the immediate future. Certainly, if we’re talking five or 10 years, we have to keep our eyes on the future, but right now you could not be sitting in a more strong financial position than you are right now.”
Edwards credited Smith for creating a thorough Comprehensive Annual Financial Report.
“You don’t have to do what you all have done here,” he said. “I’d say probably 5 percent of all governments do this kind of thing and what I mean by that is the state law requires you have an audit of your financial statements, but it does not require that you have a Comprehensive Annual Financial Report that gives you a 10-year picture like this one does.
“It’s a lot of work. It’s a good looking document and I think it presents itself well for the city.”
Edwards said the city was in great standing at the end of the fiscal year, on June 30, 2017.
“You’ve got about $21 million in fund balance. That’s almost a year’s worth of fund balance sitting in the reserves right now,” he said. “That’s really good.
“Oftentimes a government might say they’ve got a fund balance of ‘X,’ but it’s not represented by cash. So, it’s not a very liquid fund balance. You all have a very liquid fund balance. That’s a good thing.”
Edwards said the city made adjustments throughout the year to make sure the revenues and expenditures lined up. When revenues were not coming in as estimated, the expenditures were also lowered.
“It’s a very good looking operation here,” he said.
He also praised the city for having positive cash flows in all of its propriety funds.
“I don’t get to say that very often,” he said. “Oftentimes, you’ll have one doing real well and another one not doing well. They might do ok together. All of your operations, I mean, it’s not too often that an airport actually makes positive operating cash flows. Those usually are bleeders a lot of the times, but you actually had a positive cash flow.
“It just doesn’t get any prettier than this.”
Edwards said it is not often that he comes back with no findings in an audit, but he was able to do that for the city.
“If I’m in your shoes, that’s what I want to hear,” he said.
Councilwoman Hawnethia Williams credited the financial department staff for the clean review.
“Most cities don’t look this good, I’m telling you,” Edwards said. “Most places just don’t look this sharp.”
Mayor Ronnie Johnston asked Edwards if the city was at a place where it could consider lowering its millage rate.
“I think my answer to that would be: You got here slowly over time, when you look at a city of this size and your total revenue is about $12 million in the general fund, and of that I believe about 45 percent of that was property taxes, I mean that’s not very much in property taxes when you look at a city of this size,” Edwards said. “My worry would be, I could easily be wrong on this, my worry would be if we let up what we’ve been doing I would hate to be in a situation 10 or 15 years from now where all the sudden now we gave it away and we ate our fund balances away and now we’re going to have to start going up on taxes and going up on things and slowing down on things.
“Right now you’ve got something that is really working very well that I think that you’ve probably got a pretty small tax revenue compared to cities your size. So anyone in this room or outside that might say cut our taxes, I know that’s the sentiment we all have – I’d like for my taxes to get cut, this is not a highly-taxed environment right here and it took years to get here.”
Edwards said he has seen too many places cut taxes just to have to come back years later and increase them again.