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Auditor Yost Places Chillicothe in Fiscal Caution
Columbus – Deficit fund balances in police and fire pension funds, along with the failure to perform basic accounting reconciliations, prompted Auditor of State Dave Yost today to declare the City of Chillicothe (Ross County) in a state of fiscal caution.
“These conditions can be corrected, but it’s going to take work,” Auditor Yost said. “The long-run concern is protecting the General Fund and the city’s fiscal health.”
The city has not reconciled its account journals and ledgers with the bank since May 2012, and a review of the city’s 2011 audited financial statements and other records showed no evidence that the city performed year-end or periodic bank reconciliations. In addition, the city has deficit balances in its Police Pension and Fire Pension special revenue funds in the amounts of $193,130 and $157,368, respectively, as of Dec. 31, 2011.
The Auditor of State’s guidelines for a declaration of fiscal caution include (1) unauditable financial records; (2) significant deficiencies, material weaknesses, direct and material noncompliance as disclosed in the financial audit; (3) deficit fund balances; (4) a carryover fund balance of less than one month’s average expenditures for two consecutive years, and (5) a failure to reconcile accounting journals and ledgers with the treasury.
Under the declaration and in accordance with Revised Code 118.025, the city has 60 days to submit to the Auditor of State a plan to correct the budgetary conditions that led to the declaration of fiscal caution, including eliminating deficit fund balances.
A full copy of this fiscal caution declaration may be accessed online.
The Auditor of State is one of five independently elected statewide offices under the Ohio Constitution. Auditor Yost’s office is responsible for auditing over 5,600 state and local government agencies. Staff also works in partnership with state and local governments to deal effectively with financial, accounting and budgetary issues.