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City of Akron Released from Fiscal Caution
Columbus –Auditor of State Dave Yost today released the City of Akron from fiscal caution – a designation it has held since 2011.
“Akron is a success story,” Auditor Yost said. “This is what fiscal caution is designed to do – the city heeded our early warning and took action to prevent a fiscal crisis.”
Since the declaration of fiscal caution, City of Akron worked to eliminate the fund deficits, and as of December 31, 2014, there are none. The city has corrected several accounting and budgetary practices that led to past audit citations, such as keeping appropriations within estimated resources and correctly certifying available revenue with the Summit County Fiscal Officer. Akron’s accounting system has been updated, and timely reports ensure that the current balance of every fund is monitored.
The city improved its fund structure by adding funds required by state statute (state gas taxes, state motor vehicles license fees, etc.) and uses them to record the appropriate revenues. At the date of the declaration of fiscal caution, Akron had more than 740 funds. City leaders have reduced unnecessary funds and now Akron has a more manageable 101 funds.
The City of Akron was the first entity to be placed in fiscal caution on September 30, 2011 under a new state law. A fiscal analysis found the city had deficit fund balances at December 31, 2010 and 2009 in the amounts of $87,820,000 and $116,981,000, respectively. The city also had negative cash fund balances, appropriations exceeding available resources, and failed to properly certify estimated resources -- all of which constituted significant deficiencies, material weaknesses and material noncompliance with Ohio law.
Auditor Yost worked with the General Assembly in 2011 to add the fiscal caution designation to Ohio’s fiscal distress system. He argued that cities, counties, villages and townships should not be faced with sudden declarations of fiscal watch and fiscal emergency. Under fiscal caution, the subdivision is given earlier notice of financial concerns and an opportunity to make adjustments to avoid further decline.
A full copy of this fiscal caution termination may be accessed online.
The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,800 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.