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."
General News on 08/29/2018