City of Darlington receives Clean Audit
Darlington City Manager John Payne. PHOTO BY STEPHAN DREW
By Stephan Drew, Editor
editor@newsandpress.net
Each year, the City of Darlington is required by law to undergo a complete audit of the city’s finances. For the fiscal year 2021-2022, the audit was done by Bill Hancock, CPA, of The Brittingham Group LLP in Columbia, SC. The City cooperated, in all material aspects, with the compliance requirements. Numerous financial documents were analyzed, and they found no irregularities or abnormalities in the city’s records.” During the audit, the examiners identified no deficiencies in internal control over compliance. Thus, the City of Darlington was issued what is called a “clean audit.” The audit was conducted in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. The company doing the audit is required to be independent of the City and to meet their ethical responsibilities, in accordance with the relevant ethical requirements relating to the audit. One of the purposes of any audit is to identify and assess the risks of material misstatement of financial statements, whether due to fraud or error. The examiners found no such instances. According to the audit, there were no material weaknesses, no significant deficiencies, no instances of noncompliance relating to the financial statements of the City of Darlington, and no questionable findings were reported. In the audit, discussed at the February 7, 2023, Darlington City Council meeting, the total assets of the City were $26,499,867, and the total liabilities were $17,407,141 (net assets of $9,092,726). These assets are not liquid funds which are readily available, but also includes items which may be regarded as assets — accounts receivable, property tax receivables, funds due from other governments, prepaid insurance, capital assets and inventory of supplies. Liabilities include accounts payable, accrued payroll and pensions, unearned revenue, long-term liabilities and accrued interest payable. General Fund revenues noted a $302,692 increase over last year, leaving a fund balance of $3,334,484 at the end of the year. Also, total business-type activities (Water and Sewer, and Stormwater) accounted for $2,850,610 in expenses while the charges for these services was $3,356,219, leaving a net increase of $505,609. Fines and forfeitures taken in by the City amounted to $156,347. The Water and Sewer Fund had a total operating revenue of $3,123,393 with operating expenses of $2,562,012, leaving a net of $561,381. Add to this amount the $82,297 revenue from the Stormwater Fund, and the net for the two departments increases to $643,678. This is a considerable improvement over the past decade, when the two funds consistently experienced significant losses, as follows:
2014 – LOSS of $15,961
2015 – LOSS of $217,068
2016 – LOSS of $321,515
2017 – LOSS of $418,256
2018 – LOSS of $640,909
2019 – LOSS of $444,953
2020 – LOSS of $784,342
2021 – LOSS of $29,498 (first nine months after water rate increase)
2022 – GAIN of $505,609 (first full year of water rate increase)
After 10 years of losses in the Water Department (totaling approximately $2,872,502) the $505,609 gain last year reduces the total loss for the decade to $2,366,893. These are only some of the amounts noted in the findings of the audit. The complete audit is available to the public online at https://www.cityofdarlington.com/wp-content/uploads/2023/02/COD-FY-2022-Financial-Audit.pdf In questioning John Payne, Darlington City Manager, he was happy with the auditor’s report and direction of the City. “When I was hired, I initially focused on operations and financial stability,” he said, “The City had experienced financial difficulties and serious infrastructure problems. Pipes were bursting all over Darlington. We found some pipes and manholes to be 80-100 years old. Without proper funding and maintenance, our system would continue to decline. Also, our cash investments were not giving us the return we could otherwise earn. Thanks to the efforts of my team, we are stronger financially, have increased our return on investments over 40 times in only six months, and are repairing our aged water, sewer, and stormwater infrastructure.” On the improving financial status of the city, Payne stated, “We now have the money in the bank to continue to tackle these problems. This is only a beginning, though. It will take more time to improve our entire system.” When asked where he sees Darlington in five years, Payne responded, “Darlington is on the upswing; in five years it will look much better than now. Businesses are opening all over the city and hundreds of millions of dollars of investment are being made here.” Payne also spoke of current projects, cooperation and support, “City Council recently voted to build a splash pad which will improve the quality of life for residents and bring in more revenues for area business,” he said, “We also have a very positive working relationship with area municipalities, the County and School District, and our local state delegation. Everyone doing their part to move Darlington forward is bearing fruit.”