Treasurer, auditor explain county's cash flow problem

We would like to take this opportunity to explain the budget “Cash flow” issues Okanogan County encountered earlier this year. The way revenues flow in the early months of any year can cause “cash flow” issues for the County. In January, February, and March, revenues received by counties are usually lower than in other months throughout the year. In order for the County to meet its obligations and expenditures for the Current Expense Fund, which supports 27 different departments, plus other funds and agencies such as Public Health, Veterans, Mental Health, Developmental Disabilities, Emergency Services, and Drug Task Force, it is sometimes necessary to move money from the Current Expense Reserve Fund to the Current Expense Fund to cover the shortfall. A “Cash flow” issue is exactly what occurred in March of 2016. It had nothing to do with excessive spending or an unbalanced budget. In addition to the first quarter’s low revenues, also contributing to the shortfall, the projected carryover from December 2015 to January 2016 was lower than anticipated. The factors impacting the carryover were as follows:

1. A few Current Expense departments went over budget in 2015.

2. Due to the fires last year, there were unforeseen expenditures for which, as of March 2016, the County had not yet received reimbursement from FEMA.

When the County Treasurer and County Auditor see a possible shortfall, as we did earlier this year, it is our responsibility to notify the County Commissioners so important decisions can be made and a plan put in place to cover the shortfall. In March, it was advised by the Finance Committee to transfer $500,000 from Current Expense Reserve so payroll could be met. At the same meeting a decision was made to meet with each Current Expense Department Head, tell them of the situation, and ask if some expenditures could be delayed until June when the flow of revenues for the County would be more consistent. The departments were very cooperative in doing so. It was also decided that if revenues were still minimal, there would need to be a resolution in place to move money at a moment’s notice in case of a shortfall with the next payroll period. A resolution was put in place to transfer funds, if necessary, from the Medical Reserve Fund, the balance of the Current Expense Reserve Fund, and the Vehicle Reserve Fund totaling $605,463.

As of June 30, 2016, the cash- on-hand balance was determined to be sufficient to cover expenditures, resulting in the rescinding of Resolution 32-2016. In addition, the $500,000 that was moved in March to the Current Expense Fund was transferred back into the Reserve Fund.

When we see “red flags” for “cash flow” issues, every precaution available is put into place to ensure the quality of customer service our Okanogan County residents expect does not break down and we are able to move forward with as few problems as possible.

Thank you

Leah McCormack

Okanogan County

Treasurer

Laurie Thomas

Okanogan County Auditor