In this agenda item of Monday’s Commissioners Court, Bowie County Judge Sterling Lacy asked his son, Steve Lacy to make a presentation regarding “the differing reports from the County Auditor.”
Bowie County Auditor William Tye’s estimates to Commissioners Court of how much cash the county had on hand at the beginning of the fiscal year (October 1) have varied by over $5 million.
In November 2013, Tye reported to the Court that the county began the year with $2.2 million in the bank. In April 2014, he reported that the cash on hand – as of October 1 of the previous year – was negative $667,778. In May 2014, he reported that the beginning balance was negative $3,400,762.
Tye has said that these numbers, until May, were only estimates or projections.
According to Judge Lacy’s son, Steve Lacy, an auditor with over 20 years experience in non-profit organizations, “The beauty of an accountant using modified accrual accounting, is, if it’s done properly, you punch a button, you get a report.”
Lacy then spent the next half hour detailing how Tye’s varying estimates had caused problems with how the Commissioners made their decisions, and contributed to the current financial crisis, including the Court’s decision to borrow $5 million against next year’s taxes. He pointed out that on Tye’s report that showing that the county began the fiscal year with a $3.4 million deficit, there was an adjacent item that showed a CD worth over a million dollars. Tye replied that the CD wasn’t available as cash as of September 30. Lacy pointed out that it became available shortly thereafter, and that it actually made the reported deficit only $2.4 million, especially in relation to the tax anticipation note. He told the Commissioners that because of that, they were about to tax the citizens of Bowie County a million dollars too much.
After Steve Lacy concluded his presentation, Tye replied to his remarks, and stated that, “The only time we actually accrue anything is at the end of the year…. We don’t accrue during the year.”
Steve Lacy then replied, “Then I’ll make a comment to the Court: There’s no way you can make an accurate decision, for every month of the year, when you’re making decisions, because you don’t know what’s out there. That should be done monthly. In any other corporation in the world that is done probably more than monthly, but it’s done at least monthly so you have meaningful information.”
Tye then stated, “The only other comment I’d like to make is, I will stand by the 3.4 million [dollars]. A lot of the numbers I did provide, I was asked for estimates, and that’s exactly what I did, but I will stand by the $3.4 million because that’s the figure that I sent to the Attorney General [for approval of the tax-anticipation loan of $5 million] and that’s what’s on our cash… balance at the end of the year.”
Steve Lacy asked, “Then how do you explain the one million [dollar] CD right next to it [on the report]?” Tye replied, “They wanted operating cash, and that’s what I gave them. That’s what I was told by the attorney, that’s how he wanted it to be prepared.” Judge Lacy asked Tye, “Are you talking about Tom Pollan, made that recommendation?” Tye answered, “Yes, sir.”
Commissioner Kelly Blackburn asked for a vote of confidence from the Court, stating, “I am satisfied with our auditor, where he stands, as of now. That is my opinion, for whatever it’s worth.” Judge Lacy replied that since that wasn’t on the agenda, that they couldn’t vote, but offered to put it on the agenda for the next Court. County Legal Advisor Carol Dalby stated that the County Auditor is appointed by, and is an employee of, the district judges, and said, “The district judges have confidence in the county auditor.” She said it isn’t the Court’s position to have a vote of confidence; that lies within the purview of the district judges’ office.
Financial Advisory Committee member Joe Dike asked to speak, and said, “We can argue about whether we can spend these funds, whether they’re restricted or not. But the most important thing is we’re still spending more than we’re bringing in. I didn’t want to lose sight of that.”