Payson Gets Pretty Clean Audit

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Payson got a clean bill of health from its auditor last week, with a couple of minor “tsk-tsks.”

However, the outside auditor also warned town budget planners they will have to cope with a new state law making it harder to set up separate funds for separate purposes.

That’s probably not such a bad thing for Payson, which has a habit of stashing money in special funds and then kind of well, losing track.

Auditor Dennis Osuch said that basically everything checked out in the town’s annual, state-required audit. The auditor reviews the town’s books and financial practices and makes in-depth reports on how the town handles millions of dollars in various state and federal grants.

Osuch said the audit revealed only a few problems, like how the various departments tracked cash and valued various assets.

The audit also demonstrated the town remains below its state-established spending limit and has no problems accounting for various grants, including a $10.5 million stimulus grant the town got from the federal government that will pay nearly one-third of the cost of the Blue Ridge pipeline.

The auditor also briefed the council on changes in state law concerning how the town goes about setting up separate funds.

The change comes at an interesting moment for Payson, which has a few times in the past three years happily stumbled across special funds stuffed with cash.

The first occasion took place nearly two years ago, when a review of the budget revealed two separate funds containing nearly $1 million. The fund has been set up to help the town save up money for street improvements. Budget planners had lost track of the legal requirements of those two funds in the great shuffle of special purpose funds that complicate any reading of the town budget. Budget planners had assumed the million dollars was legally reserved for street improvements, like money in a different fund where gas tax money passed along by the state ends up. However, Town Manager Debra Galbraith eventually realized that town officials had set up the fund on their own. The discovery provided a million-dollar windfall for the town, then struggling with plunging sales tax revenues and looming layoffs.

It happened again just recently, when town budget planners discovered some $200,000 that had accumulated in a wildlands fire fund. The money came from payments by the Forest Service when town fire crews helped fight forest fires. When town officials looked more closely at the fire fund, they realized that they could spend the money on any town function — not just buying equipment for fighting forest fires. As a result, that money is now providing a cushion in case Payson doesn’t get a hoped-for federal grant to pay salaries for the six new firefighters necessary to put a two-man crew in the new, third fire station.

Osuch said the new system will require specific council action to set up a separate fund — and funds will be categorized based on whether money in that fund can only be spent for specific things.

“So the two funds that were set up without council approval have not been set up under this scenario?” asked Payson Mayor Kenny Evans.

“It depends,” said Galbraith. “None of the special revenue funds were set up by the council. But with the categories we had before, it would have been easier to slip something through.”

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