Akron isn’t out of the woods with its accounting practices, but has made progress, state Auditor Dave Yost said Tuesday after his office released the city’s 2011 audit.
“We appreciate the significant progress Akron has made in reducing deficits,” Yost said in a written statement. “We look forward to the completion of their recovery plan and the day we can release the city from fiscal caution.”
This was an about-face from Yost’s reaction this time last year, when he released Akron’s 2010 audit. He then ordered the city to fix poor accounting practices and made Akron the first municipality in Ohio to be placed in a newly created “fiscal caution” category.
The 2011 audit comes when Akron is still proceeding through a plan the city created — and Yost approved — in February to address his concerns.
“This audit was a clean opinion,” city Finance Director Diane Miller-Dawson said. “He brought up no new concerns. His staff told my staff and me they could tell we have been really trying to accommodate their concerns. That is something we will continue to do.”
With Akron’s 2010 audit, Yost faulted the city for bad accounting practices that led to a $104 million fund deficit as of that March. He said Akron has been undertaking capital projects without the revenue to pay for them and faulted the city for having too many funds.
City officials have said Akron had money elsewhere in its budget to cover the negative fund deficits, with more funds having positive than negative balances. After one failed attempt to address Yost’s concerns, the city submitted a plan in early February that Yost deemed “workable.” The city already had reduced its number of funds significantly — from 740 to 121 — and pledged to eliminate its negative fund balances by the end of 2013.
Yost’s 2011 audit for Akron again points to some of the same concerns, including appropriations exceeding estimated resources in several areas, negative balances in 11 funds and listing some revenue as “miscellaneous.”
Miller-Dawson said many of the issues Yost raised have been addressed, such as the miscellaneous revenue. Because the city had to reduce its number of funds, she said the finance department ended up with miscellaneous revenue that needed to be eliminated.
“You won’t see that next year,” she said. “It was because of all of the work we have to do to eliminate extra funds.”
Miller-Dawson said Akron had about $20 million in negative fund balances as of the end of 2011 and should have no problem doing away with this by the end of 2013, as the city promised in its plan.
“I believe we will meet that goal,” she said.
Akron’s latest audit is available at www.ohioauditor.gov.