The State Auditor placed the city in this status after finding deficit fund balances in police/fire pensions.
State Auditor Dave Yost has placed the city of Chillicothe in a state of fiscal caution after finding deficit fund balances in police and fire pension funds and a failure to do basic accounting reconciliations.
According to the state auditor's office, the city has not reconciled its account journals and ledgers with the bank since May 2012, and a review of the city’s 2011 audited financial statements and other records showed no evidence that the city performed year-end or periodic bank reconciliations.
In addition, the city has deficit balances in its Police Pension and Fire Pension special revenue funds in the amounts of $193,130 and $157,368, respectively, as of Dec. 31, 2011.
The Auditor of State’s guidelines for a declaration of fiscal caution include: (1) unauditable financial records; (2) significant deficiencies, material weaknesses, direct and material noncompliance as disclosed in the financial audit; (3) deficit fund balances; (4) a carryover fund balance of less than one month’s average expenditures for two consecutive years, and (5) a failure to reconcile accounting journals and ledgers with the treasury.
The city now has 60 days to submit a plan to correct the budgetary conditions that led to the declaration of fiscal caution.
“These conditions can be corrected, but it’s going to take work,” Auditor Yost said.
“The long-run concern is protecting the General Fund and the city’s fiscal health.”
