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Dare County’s fiscal year 2024 independent auditor provided a clean, unmodified opinion of the financial affairs of the county.

On page 12 of the Annual Comprehensive Financial Report, the auditor’s letter from Potter & Company, P.A. states: “the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities … as of June 30, 2024 … in accordance with accounting principles generally accepted in the United States of America.”

The firm’s auditor Dan Morrow told the commissioners that is “the highest level of assurance” that auditors can give that the financial statements are materially correct.

The additional three clean, unmodified reports, also delivered by Morrow, are included in the report. For instance, because the county received of $100,000 in federal grants, the medical assistance program was examined. Major state grants about three water resources grants and public school lottery funds were also examined. No audit findings on grants and no grant questioned costs have been noted since 1995.

Morrow praised the staff to the Board of Commissioners. “Your staff is going a good job.”

The Dare County audit report was submitted to the state treasurer of North Carolina on Nov. 25, 2024. The deadline was Dec. 1, 2024. Only 28 counties submitted audits by the deadline, mainly due to the hurricane destruction in western North Carolina.

Dare County finance director David Clawson told the board that three counties and 50 towns and cities had not submitted 2023 audits. Additionally, 14 counties and 127 cities and towns are placed on the Unit Assistance List. He said a government had to do something really bad to get on that list and that statewide, financing was not in great shape.

As reported in fiscal year 2023, the Water Fund’s Capital Asset Condition Report was below 0.50. This year, the ratio was 0.46. Last year and this year, Dare County submitted a letter explaining the ratio. Clawson told the commissioners it “is not an issue.”

Clawson also reported that an error correction was made. The county received incorrect instructions on how to book opioid funds. The correction set up a major fund for opioid funding, booking the entire amount received over 18 years and subtracting annual payments.

The fiscal year 2024 budget called for reducing the General Fund’s fund balance by $9.4 million and decisions were made to send $6 million to capital, $1 million to teacher housing, $1.5 million to housing and $932,754 to school mold.

But actually, the fund balance increased by $1,459,207.

Clawson explained revenues were over budget by 2.39% or $3 million, expenses were under budget by 7.61% or $9.2 million. The COVID-19 fund was closed and $532,798 was sent to the General Fund and Home Health and Hospice sent $2.6 million to General Fund, making a total of $15.8 million. In his presentation, Clawson itemized revenues and under-budget departments.

Clawson then reviewed the separate funds, five of which increased and three decreased. For example, the Capital Investment Fund increased by $11.6 million. That total reflected a $6 million transfer from the General Fund, a fund balance budgeted increase of $4.4 million and $2.9 million in under budget expenditures. Almost all of the under-budget increase is open purchase orders at fiscal yearend 2024 and 2023. The open purchase orders from 2023 are ambulances that were ordered in 2023 but have not been delivered. Clawson attributed that situation to supply chain issues.

For the Water Fund, the total net position is $61.8 million. The audit’s 2024 increase is $2.3 million. Water sales increased by 7.28% due to a 2% water rate increase and installation of new meters that are more accurate in reading usage.

Since 2017, the total governmental net position shows an upward trend, going from below zero in 2017 to above $150 million. Clawson pointed out the changes that had been made from 2017, such as reduction in school debt, changes in the health insurance plan and retiree health, creating and funding irrevocable trusts for other post-employment benefits and law enforcement officers special separation allowance.

In the final section, Clawson delved into the particulars of the insurance fund and its changes since 2015, including instituting plan options, opening a wellness center with the Outer Banks Hospital and expanding services, switching to MedCost from Blue Cross Blue Shield, reducing spouse coverage and adding biometrics to the wellness plan.

“It’s worked,” said Clawson. The fund balance has gone from negative $3.8 million in 2015 to $5.6 million in 2024.

The commissioners under Clawson’s leadership have also tackled retiree health. In 1984, Dare County offered retiree health coverage for any employee who retired under the state retirement system. As Clawson explained, North Carolina is a contract law state so retiree benefits offered at the start of employment are the benefits that must be provided at retirement.

Dare County commissioners made a series of policy changes starting in 1999 with employees paying a percentage of a spouse’s health insurance. In 2007 and 2023, policy changes pushed up retirement benefits to 20 years of continuous service and in 2023 to 30 years of continuous service.

Clawson said the board has taken steps to address issues over the years and those actions are now showing.

After the presentation, commissioner Rob Ross said “that’s really good stuff.”

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