PILOT MOUNTAIN — Pilot Mountain officials are pleased with the results of the town’s most recent financial audit, which confirmed cash reserves more than doubled from the previous year.
According to town manager Homer Dearmin, the town is now in compliance with state government requirements after a 2011 audit triggered scrutiny from the North Carolina Local Government Commission and forced the town to enact budget cuts, furlough days for employees and other measures to reverse its financial course.
“The Local Government commission forcefully recommends a minimum fund balance of eight percent and comparable municipalities carry a fund balance of at least quadruple that,” said Dearmin. “You (the town) want to have cash on hand in case of an emergency and also to finance large projects or equipment purchases. The new audit shows we are on the right track to getting the town back where we need to be financially.”
He also explained in June 30, 2011 the town’s unrestricted fund balance was around 4.4 percent or just over half of one month’s operating costs.
The audit was performed by Gibson and company, PA, a Winston-Salem accounting firm which has audited the town for the past several years. The company reports the unassigned fund balance for the town’s general fund was $143,785 or 9.74 percent over the fiscal year. Dearmin, who was appointed to the office by the Pilot Mountain Board of Commissioners in October 2011, praised the town’s employees and governing board for the turnaround.
“Our employees have worked very hard over the past year to get the town in better shape financially, even making personal sacrifices to make that happen,” said Dearmin. “Those measures were not pleasant for anyone but were essential to getting the town out of financial peril. The town commissioners made tough decisions and drastically cut the budget following the recommendations of our finance staff and the fact we have pulled ourselves out of the hole is a credit to their hard work and making prudent decisions.”
He said all town employees took six unpaid days off between January and June. Dearmin also took furlough days and declined a contracted salary increase until the new fiscal year. He explained the new audit report shows an increase in general fund net assets of $147,815. Dearmin said last year’s audit showed a loss in net assets of more than $350,000 which means net assets of the general fund have seen a $500,000 turn-around over the previous fiscal year.
“Better budgetary control, involving department heads more in financial decisions and greater financial oversight by the mayor and board of commissioners over the past year have made this happen,” said Dearmin. “We didn’t get ourselves into a bad position overnight and we can’t recover from that overnight, but this is a really good start.”
“We have to look at the budget throughout the year and adjust it when necessary,” Dearmin said. “Every decision made at the staff level and the board level has to be checked against our financial position and our goal to improve. If we do that, we’ll get back to where we need to be.” He said the town still has work to do to get its finances back in order even with the encouraging results of the audit.