Displaying items by tag: fiscal emergency

The Office of Ohio State Auditor Dave Yost has released the Village of Lakemore in Summit County from fiscal emergency status that they've been under for over six years. 

Back on August 31, 2010, the village was placed under fiscal emergency due to five aggregate deficit fund balances totaling $830,450, and a treasury fund deficit of $584,532, as of May 31 of the same year. 

The status was lifted because of the efforts of the village to erase more than $1,000,000 in combined debt between the general fund and the treasury fund. In the press release, Auditor Dave Yost said, "After a six-year battle, I'm pleased to see the village has finally defeated its deficits. This is a significant moment because it represents a fresh start for the community." 

Read the full release from the State Auditor's office below: 

Village of Lakemore Released from Fiscal Emergency

Columbus – Auditor of State Dave Yost today released the Village of Lakemore (Summit County) from fiscal emergency, a status it held for more than six years.

The village was placed in fiscal emergency on Aug. 31, 2010 due to five aggregate deficit fund balances totaling $839,450, in addition to a treasury fund deficit of $584,532, as of May 31, 2010.

“After a six-year battle, I’m pleased to see the village has finally defeated its deficits,” Auditor Yost said. “This is a significant moment because it represents a fresh start for the community.”

Among the steps taken to restore fiscal stability, the village erased an $800,000 general fund deficit, as well as a $584,532 treasury fund deficit, through a 50 percent income tax credit reduction. According to the village, the tax credit will be reinstated following its release from fiscal emergency.

Transfers from the general fund eliminated another $197,000 in deficit balances in the police disability and pension, police facility, capital improvement, and emergency medical services (EMS) funds. Voters also approved a 4.25 mill five-year fire and EMS levy on Nov. 3, 2015, enabling the village to move fire and EMS expenditures from the general fund to the levy fund.

Additional actions taken by the village included curtailing expenditures across the board and removing the village administrator position to generate an extra $60,000 in savings. 

The village also had to satisfy the following requirements to be terminated from fiscal emergency:

1. Effectively implement a financial accounting and reporting system in accordance with Section 118.10(A) of the Ohio Revised Code; 
2. Correct or eliminate all fiscal emergency conditions and prevent new ones from occurring;
3. Meet the objectives of the financial plan; and
4. Prepare a five-year forecast in accordance with standards issued by the Auditor of State; the opinion expressed by the Auditor’s office is “nonadverse.”

A full copy of this fiscal emergency termination is available online.

Coventry Local Schools is being placed in fiscal emergency.

The district has been in a fiscal watch for over 18 years, a situation that state auditor Dave Yost says isn't getting any better.

"They're looking at pretty close to a million dollar deficit this year," Auditor Yost tells WAKR.net, "and they haven't been able to find a way out."

Coventry Superintendent Rusty Chaboudy says that the district actually requested the fiscal emergency status, for a reason.

"To be able to borrow from the state Solvency Loan," Chaboudy tells WAKR.net, "pay off some of our debt, and get the school district on the correct financial track."

Yost says there is some short term help that the district could tap to help pay immediate expenses, while fixing the long term situation.

 "We don't want the school to miss their payroll, and we're in the middle of a school year...the first issue is the kids," Yost says. "So, the state education department does have a little flexibility there to help out on a short term basis, while we get the ship righted."

The state will take over most financial decision-making through a commission five member commission.

That commission has to approve most spending, rather than a local school board.

(State Auditor's office, news release) The inability to submit an acceptable financial recovery plan that eliminates the projected current year deficit prompted Auditor of State Dave Yost to place the Coventry Local School District (Summit County) in a state of fiscal emergency.

"It's no secret that the Coventry Local Schools have been facing a constant financial struggle," Auditor Yost said. "With today's elevation into fiscal emergency, we'll take a hard look at their issues and help the district find a path toward solvency."

The Coventry Local School District was placed in fiscal watch on May 15, 1997 by the Auditor of State based on the following:

· An operating deficit of $895,000, which exceeded 8 percent of the previous year's general fund revenues;

· An unencumbered cash balance in the general fund (minus property tax advances for the preceding fiscal year) of negative $306,000, which was less than 8 percent of the preceding fiscal year expenditures; and

· The failure to pass a levy that would raise enough revenue in the succeeding year to eliminate conditions one and two.

After the declaration of fiscal watch, the district was required to submit and update a financial recovery plan each year with the state superintendent of public instruction. However, the district's board of education passed a resolution on October 26, 2015 that stated their inability to adopt a financial recovery plan that would eliminate the projected current year deficit. With today's declaration of fiscal emergency, the Auditor of State's office will conduct a full financial analysis of the district and certify the deficit to the Ohio Department of Education.

A Financial Planning and Supervision Commission will now be created to assume all or part of the powers of the board of education. Three members of this commission must be appointed within 15 days of this declaration of fiscal emergency. A financial plan must be developed by the commission within 120 days of its first meeting to address the district's financial crisis.

The Auditor of State serves as an advisor to commissions for all school districts in fiscal emergency. In this role, the office provides accounting training and assistance, as well as monthly monitoring of the district's financial activity to ensure compliance with the recovery plan and various accounting rules and reports.