By LeAnn R. Ralph
MENOMONIE — Even though Dunn County’s expenses exceeded the revenue by $760,000 in 2018, the percentage of unassigned fund balance to general fund expenditures is 38.8 percent, which is above the recommended 25 to 33 percent.
All together, $7 million is due from other funds, including $6.2 million to the general fund from helping The Neighbors of Dunn County with the nursing home’s deficit, said April Anderson of Clifton Larson Allen LLP, at the Dunn County Board’s July 31 meeting during her review of the 2018 audit.
The percentage of unassigned fund balance to general fund expenditures of 38.8 percent, compared to the recommended 25 to 33 percent, means the county’s financials are doing all right, she said.
In 2018, the highway department, which is an enterprise fund, suffered a loss of $882,000, Anderson said.
The highway department’s ratio of assets to liabilities is 4.43, and greater than 1 is desirable, so the highway department has enough assets for the liabilities, she said.
The Neighbors also is an enterprise fund and suffered a loss of $1.2 million in 2018, Anderson said.
The deficit at The Neighbors was due to increased operational costs, and the current ratio of assets to liabilities is .83, with greater than 1 being desired, she noted.
Even though the ratio for The Neighbors is .83 in 2018, the ratio is still higher than it was previously, Anderson said.
The loss of slightly over $1 million for The Neighbors in 2018 was a budgeted item, she noted.
During another agenda item at the July 31 meeting, a short video from LeadingAge Wisconsin, a non-profit organization serving the needs of aging adults and people with disabilities, pointed out that a number of nursing homes in Wisconsin have closed recently due to a lack of revenue and that in the next several decades, more new nursing homes will need to be built because of the aging population in Wisconsin.
Wisconsin has the lowest Medicaid reimbursement rate for nursing homes in the country.
Insurance
Dunn County’s self-funded workers’ compensation and health insurance both suffered losses in 2018, Anderson said.
For workers’ comp, the claims exceeded the revenue by $63,000, she said.
The loss is, however, the first year of loss in the past several years. In 2014, the workers’ compensation fund had a surplus of $100,000, Anderson said.
Dunn County’s self-insured health insurance experienced the second year of loss in 2018 with a deficit of $612,000, she said.
The health insurance fund, however, had a surplus of $300,000 in 2014, Anderson said.
Debt
Dunn County currently has outstanding long-term obligation debt of $33 million, Anderson said.
The general obligation debt limit is 5 percent of the county’s equalized value, meaning Dunn County has a debt limit of $158 million.
The $33 million in outstanding debt is 21 percent of the debt limit.
Most counties generally operate between 0 and 20 percent of their debt limit, Anderson said.
Debt service payments in 2018 were $2.5 million on the principal and $1.1 million in interest, she said.
Clean opinion
Clifton Larson Allen LLP issued an “unmodified” opinion concerning the 2018 audit of the county’s financial statements, Anderson said.
An unmodified opinion is the highest opinion that can be issued, she said.
The clean opinion means Dunn County is following generally accepted accounting standards, Anderson said.
One “significant deficiency” is that Dunn County has a “limited segregation of duties,” because one or a couple of people in various departments have access to all parts of the financial process, she said.
The duties “are not as segregated as we would like,” Anderson said.
Be that as it may, many municipalities have a significant deficiency in the limited segregation of duties. In many of those cases, it is perhaps not cost effective or efficient to hire more people so the duties can be more segregated, she said.
Reconciliations
The reconciliations and detailed listings were not prepared in Dunn County at the end of 2018, Anderson said.
When auditors arrive to do the audit, “we want to see these ready to go,” she said.
Dunn County is in the middle of transferring from one financial system to another, and that may be the reason the reconciliations and detailed listings were not prepared for the audit, Anderson said.
Contracts
Another problem Clifton Larson Allen LLP flagged for 2018 was the timely execution of contracts.
Most of the time, the contracts were available and were signed, Anderson said.
The problem is the date when the contracts were signed.
Many of the contracts were signed “after the fact,” but contracts should be signed before the service is provided, Anderson said.
