At last week's meetings of Northampton County Council, they received a report from an independent outside auditing firm retained to examine the county's financial position in 2024. She gave the county an "unqualified" opinion, which is the best you can get. That report is now available online. Given the number of accusations of fiscal mismanagement, most of which are made here anonymously or by Council member John Brown, I thought I'd review it myself and suggest that you do that as well because that's the whole point of transparency. You might see something that others miss, or might be in a position to make a suggestion for improvement.
Here are the "financial highlights" as reported in the audit:
Governmental Activities:
• The assets and deferred outflows of the County of Northampton exceeded liabilities and deferred inflows at the end of the year by $174 million (net position).
• The County is reporting a deficit in unrestricted net deficit of ($20.7) million as of December 31, 2024.
• The government’s total net position decreased by $14.1 million. In addition, the governmental fund balance decreased $26.6 million.
• At the close of 2024 the County reported an ending net position of $174 million, a decrease of $14.1 million. In addition to the changes to fund balance discussed below, the following items also contributed to the changes in net position in 2024:
OPEB liability and related accounts decreased $2.8 million due to differences in actuarial estimates in both benefits paid and expected investment earnings in 2024.
Pension liability and related accounts increased $8.3 million due to differences in actuarial estimates in both claims paid and expected investment earnings in 2024.
Liability Due to P-3 Contractor decreased $2.1 million due to the near completion of the construction phase of the project discussed in Note #16
Long-term debt decreased $14 million during 2024.
Cash and Investments decreased $35.1 million due to the utilization of fund balance resources, aimed at maintaining a reserve equivalent to two months operating expenditures.
Unrestricted Net Position decreased $36.4 million due to the utilization of fund balance resources, aimed at maintaining a reserve equivalent to two months operating expenditures.
Governmental Funds:
• At the close of 2024 the County’s governmental funds reported an ending fund balance of $93.8 million, a decrease of $26.6 million. Significant governmental fund activity in 2024 is as follows:
Gracedale Nursing Home fund required a $9.9 million Transfer In from the General Fund in order to cover an operating expense deficit largely caused by an IGT shortfall that was not reported to management until late 2023. Expenditure and revenue shortfalls were also due to the use of agency nursing services to cover major staffing shortages and a lower-than-optimal resident census. The $9.9 million transfer is discussed in Note #1. (Brown's claim about the Gracedale deficit is accurate).
Pending Medical Assistance applications cause a lag in collections of accounts receivable and are not included in current year revenue if collections exceed 90 days of year end. Payments collected after 90 days are included in included in the subsequent year revenue. Included in 2024 operating revenue is $3.5 million of 2023 Medical Assistance revenue while $1.4 million of 2024 Medical Assistance billings will potentially be recognized as revenue in 2025. The amounts are reflected on the Gracedale balance sheet as unavailable.
Real estate tax revenue increased $2.3 million mainly due to tax base growth.
• At the end of 2024, the unassigned fund balance, that which is available for spending at the government’s discretion is $7.8 million. However, the entire $7.8 million represents Financial Stabilization funds governed by Ordinance #526. The $7.8 million represents the minimum amount recommended by GASB, which is 5% of general fund budgeted operating expenditures, including transfers out. Additional information can be found in the Fund Balance and Financial Reserve sections of Note #1.
Some interesting points:
1) 59.3% of the county's revenue stream come in the form of state and federal grants.
2) NorCo's total debt is $78.3 million. It has the legal authority to borrow $1.562 billion.
3) Current year revenue plus $20.6 million in the general fund is sufficient for this year's operating budget (Brown has insisted several times that the county is cash poor, but the audit belies that assertion)
4) 85% of the county's spending is for human services as well as our courts and jail.
5) There was an increase of $3.9 million in the drug and alcohol fund balance as a result of the national opioid settlement.
6) County employees get between 10-30 vacation days a year, and from 0.833 to 1.25 sick days a month. Compensated absences cost the county $7.3 million per year.
Please feel free to share your own observations.
11 comments:
MY observation is that your review is whatever Stevie Barron tells you.
"Brown's claim about the Gracedale deficit is accurate."
Yes, it is. McClure and Barron are stupid or liars or both. I suspect both. What was Barron's background before he started screwing county employees and screwing up the books? It's time for a deep dive on his financials, similar to grimy Bobby Brooks. We know he's lied about county finances. What else has he lied about. It's time for the state AG to investigate McClure and Barron. Enough is enough.
Now we see why Lamont and Steve had to drain the financial stabilization fund to the minimum allowed. Tara knows that she'll have an empty cupboard and will need to raise taxes.
LOL so true. Lamont good everyone else bad.
Fairly good news. However, it does not negate the fact that McClure and Barron mislead council and allowed employes to get messed over. Typical smoke and mirrors.
McClure, not trustworthy, not electable.
Updates on Stan and Lance? Things seem awfully quiet.
The unqualified opinion speaks to the veracity of the audit. It has no bearing on the health of the county's finances.
Anybody that understands finances and government budgets can see that we are spending down our cash reserves, increasing spending, at a rate that is faster than revenue growth.
Lamont bragged about his tax cut which was only possible because the county was receiving unprecedented amounts of money from a once in a life time pandemic.
Expenses will continue to rise will revenue will remain slow to grow which will put the next executive in a position to either cut spending or increase taxes while Lamont will be running for congress on the fact that he was a tax cutting executive.
No wonder people have no faith in the system. Its based on gold fish memory, low information voters being pandered to by grifters. If Tara and Lamont win their races it will be a sign that we are continuing to head in the wrong direction.
Where's the money, Lamont? Anyone who's curious should attend the Pen Argyl Firefighters Parade on Monday and ask him directly - and loudly. Parade starts at 1 PM.
Is it common practice for the county to utilize outside auditors? What role does the controller play in these?
McClure needs to do the honorable thing and resign in disgrace
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