During their June 20 meeting, the Gila County Board of Supervisors adopted a tentative budget of approximately $151.62 million for fiscal year 2023-2024, with a primary property tax levy rate of $4.19 per $100 of assessed value.

Before taking up that budget, though, the board was presented with results of three fiscal year 2022 audits – two of which contained nine findings between them. Melanie Chesney, of the state Auditors General’s Office, reported an unmodified, or clean, opinion in the first audit, of the County’s financial statement – meaning the County’s financial statements were reliable. Her fellow presenters then turned to the findings.

Five of these, reported Donald Bohart of the Auditor General’s Office, were in the financial statement internal control and compliance audit. The findings were that the County had awarded economic development funds without requiring documentation that the money was used to benefit the public; had not ensured that purchasing cards were used for authorized purposes; had not performed a physical inventory of its machinery and equipment since 2009; had deficiencies in its process for managing and documenting IT risks, and had insufficient controls over its IT systems and data. Bohart said similar findings had been reported since fiscal year 2017, or in the case of the machinery inventory 2013. He noted that the County has improved its economic development funds award process by ensuring that a committee evaluates award requests, and by having requests approved by the board in an open meeting.

The Auditor General’s Office recommended that the County further improve its policies and procedures for economic development awards by including pre-award and follow-up steps; Bohart added that the County anticipates making these changes by December 2023. Other recommendations were for the County to update its purchasing card policies and procedures; perform a complete inventory of capital assets and reconcile the results to County records; allocate resources to implement critical IT system controls and perform an annual IT risk assessment; and develop comprehensive written IT polices and procedures, restrict system access, manage system configuration and changes, and secure systems and data. Chesney said IT issues were among the more common findings, as technology keeps evolving.

Bohart reported that the County anticipates correcting deficiencies in the purchasing card system and reconciling capital assets by June 30, 2023 (the inventory was completed in May).

The remaining four findings came in the single, federal compliance, audit; that the County submitted its June 30, 2022 single audit report two months late, failed to ensure and document the existence of multiple sources for a contract, did not review and approve all federal program reports before submitting them, and did not prepare and submit timely and accurate information to a federal grantor agency. It was recommended that the County Finance Department allocate additional resources to meet deadlines and improve the financial reporting process; that the County require its Public Works Department and procurement officer to follow County policies for determining and documenting sole source procurement; that the Finance Department, and County management, develop policies and procedures to perform and document independent reviews of federal program reports. Presenter Daniel Hunt said the County anticipated making these adjustments by the end of June.

“This is kind of a public spanking, but I’m proud to have it because before we were in office Gila County was seven years behind in the state audit,” Supervisor Tim Humphrey said at the end of the presentation. “We’ll keep trying to stay caught up on our audits.”

Supervisor Steve Christensen said the county “has made tremendous gains in reducing the amount of findings that we have. I think nine is probably a good number as we continue to improve that going forward.”

“We have definitely found improvements,” said Chesney, “more interest in solving the problems that exist.”

Turning to the tentative 2023-2024 budget, the board held the primary property tax levy rate at $4.19, a rate that has stayed consistent since 2010. County Finance Director Maryn Belling told the board that the approximately $151.62 million budget was around $27 million higher than last year’s. The top three projected revenue sources for 2023-2024 are special revenue (27%), primary property tax levy (25%) and grants (17%). As for projected expenditures, the top three categories are general fund (42%), grants (22%) and capital (14%). In the general fund, the highest expenditures are for public safety (31%), general government (22%) and courts/criminal defense (20%).

New budget items for 2024 include $2.78 million in federal earmarks applied for; $3.4 million in American Rescue Plan Act projects, including $325,000 for restrooms at the Gila County Fairgrounds; $11.6 million in infrastructure projects including roadwork, the Tonto Creek Bridge and expansion of the Russell Gulch Landfill; and additional capital needs, including public safety and a vehicle replacement plan.

The board will hold a truth in taxation public hearing and move to adopt a final budget on July 18, 2023.