City of Alliance Placed in Fiscal Caution
Columbus – Dwindling balances in more than a dozen funds today prompted Auditor Yost to place the City of Alliance (Stark County) in a state of fiscal caution.
“The city’s fiscal well is starting to run dry,” Auditor Yost said. “Without immediate action, I’m concerned the city’s financial condition will decline even further in the years ahead.”
A review of financial data performed by the Auditor’s office found the city meets the criteria for the fiscal distress designation because it has gone two straight years with critically low year-end carryover fund balances.
At the end of calendar year 2016, the city had 17 funds with low carryover balances, four more that it had at the end of 2015. The carryover balances amounted to less than one month of average spending.
Based on the review, the city does not have sufficient resources available in other funds to subsidize the endangered funds.
The city has 60 days from the declaration to submit to the Auditor of State a plan to remedy the conditions that led to the declaration of fiscal caution. A failure to do so could result in an elevation to fiscal watch or fiscal emergency.
The Auditor of State’s guidelines for a fiscal caution declaration include:
- “Unauditable” financial records;
- Significant deficiencies, material weaknesses, direct and material noncompliance as disclosed in the financial audit;
- Deficit fund balances;
- A carryover fund balance of less than one month’s average expenditures for two consecutive years; and
- A failure to reconcile accounting journals and ledgers with the treasury.
A full copy of this fiscal caution declaration is available online.
The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,900 state and local government agencies. Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.