The government of Greene County has received a clean audit opinion every year since 2000. It continued that 22-year streak with its latest report, despite being burdened with the compliance challenges around federal funds.
Completed by Springfield-based firm KPM CPAs and Advisors, along with the assistance of Greene County Auditor Cindy Stein, the 2022 audit was presented to the Greene County Commission on Oct. 19.
While the county is accustomed to receiving clean audits after more than two decades of good marks on its financial statements, it was nonetheless well-received by the commissioners. Compliance with federal spending — which remained exponentially higher than pre-COVID-19 pandemic levels in 2022 — continued to burden county government staff.
Federal spending, and accompanying compliance, remain high
Typically, programs that cost at least 3 percent of the county’s total federal spending have to be tested once every three years. However, COVID-19-related programs have to be tested every year because they are considered “high risk,” according to KPM shareholder Rebecca Baker.
In addition to that triennial audit for “Highway Planning and Construction Cluster,” auditors also looked at the federal spending of the Coronavirus State and Local Fiscal Recovery Funds — authorized by the American Rescue Plan Act (ARPA) — and the Emergency Rental Assistance Program (ERA), which wrapped up in Greene County earlier this year.
In providing a clean or unmodified opinion, KPM found no material weaknesses or significant deficiencies in the county’s handling of federal funds. At $32.4 million, Greene County’s total expenditures of federal funds remained well above the $2-3 million a year that was typical from 2017-2019, according to Baker.
“I know there's times that our team is frustrated by the compliance that kind of comes out of our office with regard to federal dollars, but this is exactly why,” Stein said. “And we're a stickler when it comes to federal dollars and the documentation and what's required. If we don't do that at the ground level, then when Rebecca gets to her job, there's going to be findings because we didn't comply with what's federally required.”
Baker and Stein gave high praise to Debbie Allen of the Greene County Auditor’s Office, who focuses on grant management and keeping tabs on federal spending. Keeping track of federal spending is crucial to help the county be awarded future grants and maintain its bond credit rating, which saw an increase in 2022.
Stein said smaller counties — even those that also have their own auditor — have been challenged with the “monumental task” of handling federal compliance and that her office has been contacted by several other Missouri counties for insight and direction.
“Those federal dollars, it's hard to even describe what additional work that takes,” Stein said.
Stein said the implementation of ARPA has gone smoother than the Coronavirus Aid, Relief, and Economic Security Act (CARES), due to lessons learned and added guidance from the U.S. Department of the Treasury.
County auditor hopes to spend down federal funds in 2024
As ARPA spending winds down, with 80 small businesses in Greene County recently awarded funding, Stein hopes its federal compliance worries also diminish.
“One of the things that I've been a big proponent of, and I don't know how we're gonna get there, per se, but I would like to have all our federal spending done by the end of 2024,” Stein said. “If we do that, and we may not have control over some of these projects, if we do that, then that just extends this compliance period to two additional years.”
While ARPA funds are required to be obligated by the end of 2024, the county has until the end of 2026 to spend the money. Initially tasked with the dispersal of $56,928,520, the county has obligated $49,823,313, or 87-percent, according to Greene County Budget Officer Jeff Scott.
Presiding Commissioner Bob Dixon said he anticipates federal spending to back off in 2024. Dixon is proud of how the county commission spent COVID-19 relief money, but is hopeful the federal government takes a different approach to avoid devaluing the dollar in the years ahead.
“We don't really want to be the disperser of federal funds,” Dixon said. “We didn't mind to do it. We didn’t have the infrastructure to do it, but we made it work. I think we were very efficient and I think we've made good choices and wise investments.”
Greene County saw increases in expenses, revenues and reserves in 2022
The financial statement audit uncovered no surprises, but reflected the county’s increase in spending, revenues, reserves and other long-term assets and liabilities.
The county’s total assets increased by about $74 million, bringing it to $658.5 million in 2022, inflated by previously unspent ARPA funds and future debt service.
At $86 million, the general fund increased by $4.6 million from 2021, primarily fueled by sales tax revenues, which were up by about 11 percent.
Spending, while still well below total revenues, increased by about $12 million over 2021. Primarily composed of public safety expenditures, Baker partly attributed the increase to the operation of the new Greene County Jail, which opened in 2022.
Notably, the audit shows about a $500,000 deficit in the COVID Relief Fund. Though the county has the money, it can’t recognize that until it’s spent and, as a liability account, it suffered with other investments in 2022.
The county’s rainy day/reserve fund was strong at the end of 2022 at 58 percent of a year’s worth of operating expenses, well above the typically-recommended 25 percent. At the end of 2022, Greene County held enough cash reserves to continue operations for about seven months in the unlikely event that all income sources would be reduced to zero.
