Columbus – Deficit balances, significant audit citations, failure to file financial reports and unauditable records put Newton Township (Trumbull County) into fiscal caution, according to a declaration today by Auditor of State Dave Yost.
“Fiscal caution is a chance to get the house in order before things get worse,” Auditor Yost said. “It’s going to take some work, but let’s hope today marks the first step on the road to the financial management Newton Township taxpayers deserve.”
Under today’s declaration, the township 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.
Fund financial data as of December 31, 2011 shows three funds with deficit balances in the amount of $153,001. The deficits exceeded 2 percent of estimated revenues by $151,938. Data as of April 30, 2012, shows four funds with deficit balances in the amount of $147,967. The deficits exceed 2 percent of estimated revenues by $145,562.
The Auditor of State’s guidelines for a declaration of fiscal caution 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. Newton Township met three of the conditions.
The authority to declare fiscal caution for municipalities, counties and townships is established by Ohio Revised Code 118.025. Under fiscal caution, the subdivision has an opportunity to make adjustments to avoid a declaration of fiscal watch or emergency.
A full copy of this fiscal caution declaration 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 5,600 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.