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Audit finds county in 'good financial position'

By Judith Pannebaker BCC Editor

Ken Neffendorf of Neffendorf, Knopp, Doss &Co., PC, of Fredericksburg, presented Bandera County Commissioners Court with his usual riveting review - no, really, people were actually following along! - of the county's annual audit for the year ending, Sept. 30, 2013.
Not surprisingly, the county continues to be in an excellent financial situation.
As indicated in the financial statements, Bandera County's net position - aka excess funds - is $18,123,000, which Neffendorf described as "a good financial position."
To arrive at the net position, the county's capital assets, which include land, infrastructure, buildings, machinery and equipment and construction in progress, are added to the cash and cash equivalents and receivables for a total of $28,202,118.
From this is subtracted the county's liabilities, such as accounts payable, wages and payroll taxes, accrued interest payable and noncurrent liabilities, which total $10,079,207.
Neffendorf added a caveat, however, noting hat many of the county's assets, such as machinery and equipment, "exist with limited useful life that must be replaced in the near future."
Bandera County continues to house prisoners from surrounding counties, a process that began in January 2010. In the last fiscal year, the county received $355,000 for this endeavor, a decrease of 43 percent from 2011-2012.
Additionally, indigent heath care continues to be an unfunded mandate from the State of Texas. In 2012-2013, cost of that served was $230,000, an increase of approximately 46 percent from 2011-2012. To fund this operation, commissioners assessed a tax rate of .0073 per $100 valuation.
On a brighter note, revenues exceeded expenditures for governmental activities by $1,346,000. In addition, the unreserved fund balance in the general fund is $6,069,000 or 62 percent of the general fund expenditures. This amount is 37 percent higher than the guidelines recommended by the commissioners court or, in fact, the off of the Texas State Comptroller or, as Neffendorf stated, "A good solid fund balance."
Interestingly, the final road and bridge budget anticipated expenditures would exceed revenues by $900,000. However, actual revenues were less than budgeted by $43,000 and actual expenditures were less than budgeted by $185,000. Consequently, the county added $141,000 to road and bridge reserves.
In general, future financial issues facing the county are those faced by most counties in highly desirable portions of Texas. According to the audit, Bandera County has grown significantly in the last several years. To maintain a healthy fund balance, the court must continue to anticipate growth - and remain fiscally conservative.
As in previous years, the maintenance of county roads continues to be one of the most critical challenges. "Until the State of Texas allows counties to participate in fuel tax revenues, there is no hope for small rural counties to maintain and improve a failing road system," the audit report stated. "Ad valorem property taxes will not provide adequate revenue to allow county government to function effectively."
The only two shortcomings noted during the audit involved tax assessor-collector bank reconciliations and a minor problem in the offices of Precinct 1 and 2 Justices of the Peace.
Neffendorf noted that the tax assessor-collector tax account at Bandera First State Bank was not reconciled property. "Posting errors have not been corrected properly on the computer-generated band reconciliations. We recommend that these errors be correct in the system and additional training in operating the software be obtained if necessary."
Tax Assessor-Collector Gwenda Tschirhart told the court the clerks in her office would be retrained on the necessary software
In the justices of the peace offices, receipts were not being logged into the computer system in a timely manner - in some cases, as long as four days later. "We recommend that receipts should be entered into the system as received."
Precinct 4 Justice of the Peace Lynn Holt told the court the matter would be addressed during "budget realignments in July"; however, Judge Richard Evans indicated it should be taken care of prior to that.
"When you find something like that, do you do more scrutiny?" Evans asked Neffendorf.
"Yes," he replied.
According to county Auditor Christina Moeller, the problem has been identified in the past - to no avail. "Everything is okay for a month and then (the late receipts) just happen again," she said. "one clerk won't allow others to make entries."
"There's no reason not to send them in when you get them," Neffendorf said.
After thanking Moeller and her office for their assistance during the audit, Neffendorf asked the court for questions, saying, "We're always happy to talk about a government audit according to GASB (Governmental Accounting Standards Board) standards."
The 57-page report, completely filled with numbers for those accustomed to crunching them, can be viewed in its entirety on the county website, www.banderacounty.org.
However, Neffendorf is not through with the Bandera area as yet as his firm was recently hired to conduct an audit for the City of Bandera.
"Good luck," Evans said.
"You're going to need it," Precinct 4 Commissioner Doug King rejoined.