WALLINGFORD — The town finished last fiscal year with a surplus of $2.43 million, according to the Comprehensive Annual Financial Report, with $1 million attributed primarily to savings in school bus transportation.
That $1 million was used to help balance the current fiscal year’s budget. The Board of Education had $2.62 million in total unspent funds, with the remaining balance going either toward encumbrances or appropriations-in-force, which on the BOE side is called the 2 percent account.
Prepared by West Hartford accounting firm CliftonLarsonAllen LLP — which merged last fall with Blum, Shapiro & Co., the firm that historically has prepared Wallingford’s audit — the report’s release was delayed for several weeks due to slowdowns in the reporting process, which threw off the timing of the audit’s release.
The CAFR shows that the town's overall general fund balance increased during fiscal year 2019-20 from $26.14 million to $28.57 million, an increase of 9.3 percent.
Town Comptroller Jim Bowes said Monday that the increase is “unusually large.”
It's a change from the reductions to the general fund reported in the three previous years.
The 2018-19 fiscal year audit showed a $140,000 reduction. The 2017-18 audit showed a $1.6 million reduction, and in 2016-17 the audit showed a $1.4 million reduction.
Town officials have pointed to the departure of Bristol-Myers Squibb — formerly the town's largest taxpayer — for the past drop in revenue, since the company had paid roughly $1.5 million annually in property taxes.Accounting standards
The CAFR contains two sets of financial reports: the generally accepted accounting principals (GAAP) results and the general fund budgetary actual results. The two accounting standards provide different analyses of the town's financial health.
GAAP measures revenues and expenses, or operational results. It looks at the total assets of the town, including reserves. The GAAP method found town revenues exceeded expenditures by $2.43 million in the fiscal year that ended June 30, 2020.
According to a Jan. 29 summary by Bowes, as of June 30, 2020, the general fund had $182,000 as a non-spendable fund balance, which is made up of prepaid amounts that are waiting to be spent; $3.72 million as a committed fund balance, which is made up of amounts approved in prior budget years that carry forward into 2020-21; $7.4 million as an assigned fund balance, which is the amount approved to balance the 2020-21 budget; $997,000 also in the assigned fund balance for both government and education purchase orders that were not completed as of June 30, 2020; and $16.27 million in the unassigned fund balance, — the amount available for appropriation — which is a reduction of $511,000 from the audited balance at June 30, 2019.
According to the general fund budgetary actual results, the originally adopted 2019-20 fiscal year expenditure budget of $169.19 million was funded with anticipated revenues of $163.19 million plus $6 million from the unassigned fund balance.
During the year, $322,000 of additional appropriations were approved by the Town Council, Bowes' summary states. Departments with leftover money
The fiscal year runs from July 1 to June 30, so the 2019-20 fiscal year ran from July 1, 2019 to June 30, 2020.
The COVID-19 pandemic hit as the third quarter ended, which impacted in the fourth quarter as the early days of the pandemic brought drastic changes to daily life.
Several departments were left with tens, or even hundreds, of thousands of dollars in unspent funds.
“There are many reasons why something could show a large variance,” Bowes said.
The Police Department, for example, ended the 2019-20 fiscal year with $1.08 million in unspent funds. The savings came from department officers working fewer overtime hours and a purchase of cruisers that had to be delayed due to low factory output, Bowes said.
The Public Works Department showed $697,000 in unspent funds, the savings coming from personnel working fewer overtime hours and from using less road treatment salt during the relatively mild winter of 2019-20, Bowes said.
The Parks and Recreation Department showed $201,000 in unspent funds, with $145,000 budgeted for salaries that went unspent. The department went for a few months without a director, in between outgoing director John Gawlak, who left in May 2019, and current director Kenny Michaels, who started in August 2019.
“To the people who say, ‘well you didn’t spend your money,’ I always say, ‘you rather we had, and spent it all when we didn’t need it?’” Bowes said.