City’s 2017 fi­nan­cial au­dit in­di­cates con­tin­ued growth

Siloam Springs Herald Leader - - FRONT PAGE - By Hunter McFer­rin Staff Writer hm­c­fer­rin@nwadg.com

A pre­sen­ta­tion re­gard­ing the city’s 2017 fi­nan­cial state­ments’ au­dit was given as part of the city board meet­ing on Tuesday night, and aside from pass­ing the au­dit with no com­pli­ca­tions, the re­sults showed that the fi­nan­cial sta­tus of the city is steadily im­prov­ing.

Lead­ing the pre­sen­ta­tion was se­nior au­dit man­ager Cyn­thia Burns of BKD Au­dit­ing Ser­vices, the com­pany tasked with per­form­ing the au­dit. Of ev­ery­thing used in an au­dit to gauge a city’s fi­nan­cial well-being, among the most sig­nif­i­cant that Burns

noted is that city’s net po­si­tion.

A city’s net po­si­tion can be thought of in a broad sense as its to­tal ex­penses ver­sus its to­tal in­come and is cal­cu­lated by taking into ac­count a num­ber of things such as in­vest­ments, as­sets, li­a­bil­i­ties and more. One of its pri­mary ben­e­fits is that it is a good way to mea­sure whether a city is im­prov­ing or de­clin­ing fi­nan­cially in the long-term, ac­cord­ing to BKD’s 2017 au­dit re­port. In an ef­fort to por­tray how the city’s eco­nomic growth has changed in re­cent years, shown be­low are the changes in the city’s net po­si­tion since 2014, based upon data pro­vided in the city’s au­dit re­ports avail­able on the city web­site.

• Dec. 31, 2013 — $123.3 mil­lion; Dec. 31, 2014 — $131.8 mil­lion (6.89 per­cent in­crease).

• Dec. 31, 2014 — $131.8 mil­lion; Dec. 31, 2015 — $135 mil­lion (2.4 per­cent in­crease).

• Dec. 31, 2015 — $135 mil­lion; Dec. 31, 2016 — $140.7 mil­lion (4.2 per­cent in­crease).

• Dec. 31, 2016 — $140.7 mil­lion; Dec. 31, 2017 — $147.4 mil­lion (4.8 per­cent in­crease).

It should also be noted that the fig­ures shown are the to­tal net po­si­tion for each pass­ing year, a fig­ure de­rived from com­bin­ing the in­di­vid­ual net po­si­tions of what are re­ferred to as gov­ern­men­tal ac­tiv­i­ties and busi­ness-type ac­tiv­i­ties. Burns said that busi­ness-type ac­tiv­i­ties can be thought of as in­vest­ments where the fees in­curred upon users are ex­pected to cover costs; in the case of Siloam Springs, this in­cludes util­ity ser­vices and the air­port.

In con­trast, gov­ern­men­tal ac­tiv­i­ties are ex­pen­di­tures the city is able to make due to monies re­ceived from things such as prop­erty and sales taxes, she said. As for other as­pects of the pre­sen­ta­tion, Burns noted that to­tal rev­enues for gov­ern­ment ac­tiv­i­ties in­creased by $3.9 mil­lion, while to­tal ex­penses for these ac­tiv­i­ties in­creased by about $1.8 mil­lion.

The in­crease in rev­enue was caused by a num­ber of fac­tors, in­clud­ing in­creased sales tax rev­enue and in­come from grants, the lat­ter of which was about $1.1 mil­lion higher than in 2016, ac­cord­ing to the 2017 re­port. More­over, the city’s com­pli­ance with cer­tain state laws and its fi­nan­cial state­ments were also given an un­mod­i­fied opin­ion, which is the best opin­ion the com­pany could give, Burns said.

There were also no ad­just­ments made to the fi­nan­cial state­ment, Burns said. Ad­just­ments are made when things such as is­sues that are en­coun­tered through­out the au­dit­ing process or if there was rea­son for skep­ti­cism about the qual­ity of the ac­count­ing prac­tices of any of the city’s de­part­ments or en­ti­ties.

The pre­sen­ta­tion evoked a pos­i­tive re­ac­tion from board mem­bers, such as Ward 1 Di­rec­tor Steve Beers who asked a ques­tion of Burns at the con­clu­sion of the pre­sen­ta­tion.

“In some ways, when I think about this, most of us do not have au­dits in our per­sonal lives, and I do not think many of us want one,” Beers said. “But also, we all go to the doc­tor, and so sim­ply, this is a re­ally good check up, is that a fair state­ment?”

“Yes,” Burns said. “Just reit­er­at­ing for those who do not read au­dits,” Beers said. “This is re­ally, re­ally good news.”

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