An auditor’s report recently presented to the Forsyth County Finance Committee validates the county’s financial fitness, which has been a point of pride for the Forsyth County government for a number of years.
At a finance committee meeting Tuesday morning, Adam Fraley, engagement lead partner for Mauldin and Jenkins LLC, an auditing firm the county has used for the last eight years, presented the county’s Fiscal Year 2016 financial and compliance audit summary, which looked at Forsyth’s overall government finances, the county’s general fund and capital outlay finances and other governmental and fiduciary funds.
“We did render an opinion,” Farley said. “It’s often called a ‘clean’ opinion, [which], technically, is an unmodified audit report, meaning that the financial statements were presented fairly, and the financial position is a result of all material operations in all respects for the year ending on Dec. 31, 2016.”
According to the report, Forsyth’s government-wide total assets at end of 2016 was $2.1 billion, which was offset by $600 million in liabilities, bringing the county’s net position, or equity, to about $1.5 billion.
A “substantial amount” – $1.3 billion – of the county’s equity was made up of a net investment in capital assets, the report said. Restricted net position amounted to about $40 million, leaving Forsyth’s unrestricted net position – assets that have no external restrictions regarding their use or function —at just more than $122 million.
The county’s general fund — Forsyth’s main operating fund —increased by about $96 million in 2016, though a large part of that came from capital assets, which differs from the amount of cash in the bank, or liquid assets.
Still, the fund balance at the end of 2016 was about $54.2 million, an amount that would be able to cover approximately 175 days of county operations without certain revenue streams. That number was calculated based on 2016 expenditures, which totaled about $99.9 million.
About $1.1 million was added to the fund balance in 2016.
“That [amount] would have been higher, but, starting [several years ago], we started transferring money to the capital fund,” said Dave Gruen, Forsyth’s chief financial officer. “If we hadn’t done that, it would have stayed at higher levels. Those are management decisions, not external [factors].”
Fraley said the numbers show good financial health for the county.
“Usually, when you talk to bond rating agencies or knowledgeable folks about the financial health of a government, they may look at [whether] you have a fund balance of two to three months of your annual expenditures,” he said. “That’s about 54 percent, so it’s obviously well over two to three months.
“It’s a half a year’s expenditures y’all have in the fund balance, which is a good health position.”
Gruen said bond rating agencies look at that number when assigning ratings.
Standard and Poor’s and Moody’s Investor Services, independent organizations that provide credit ratings and research covering debt instruments and securities, have given Forsyth an AAA rating — the highest available — for the last several years, which only several counties and a handful of cities in Georgia have received.
The higher the rating, the lower the government’s interest rate on borrowed money, which District 5 Commissioner Laura Semanson said ultimately saves taxpayers money.
“Bottom line is, we can borrow money at a lower rate,” she said. “That saves [taxpayers] money having to pay [more interest] back.”
Board of Commissioners Chairman Todd Levent said the rating is crucial.
“We’re at the top of the top – the 99th percentile,” he said. “It’s another checkbox we have of things we do right.”