Navigation District Report Card

 

Welcome to the 3^rd posting of So, What’s the Rest of the Story dedicated to all things Nav District.  This is a continuation of the last posting where we take an in-depth look at what they provided in response to my Open Records Request.

 

Request 3:  Copies of the approved Budgets from 2020, 2021 and 2022 and the minutes where the Budgets were formally approved.  Printed copies of the last 2 years (2020 and 2021) and the first 2 months of this year’s monthly Financial Statements of the District to include Balance Sheets, Income Statements, Sources and uses of funds and Comparison of Actual to Approved Budget.  Copies of Treasurers Reports for each month in the last 2 years and the first 2 months of this year.

Answer:  The District provided me with the 2020, 2021 and 2022 budgets, but all 3 were marked as Proposed.  They did NOT provide any minutes where the budgets were subsequently discussed.  They did not provide any evidence, minutes, agenda or otherwise that they discussed actual numbers to budget at any time in the 2 years concluded and have not had actual to budget discussions in the first 2 months of 2022.

The District did NOT provide any monthly internal financial statements that would reflect the prudent study of the operations of the District by the Commissioners.  Instead, they provided the Financial Audit.  As anyone with a financial background knows, the Audit is NOT a financial statement in and of itself and is not a replacement for monthly review and study by the Commissioners of their financial operations.

The District did NOT provide monthly Balance Sheets, Income Statements and Sources and Uses of funds as requested indicating they simply don’t do them.  When the elected officials of a public entity do not study and take ownership of their financial condition on an ongoing basis, they are guilty of dereliction of their duties.  There is no excuse for not reviewing Actuals to Budget every month.  The following paragraph is an excerpt to the Aransas County Appraisal District’s Financial Audit as of December 31, 2021.

“Budgetary comparison schedules – Demonstrating compliance with the adopted budget is an important component of a government’s accountability to the public.  Many governments revise their original budgets throughout the year for a variety of reasons.  Under the new reporting model, governments will continue to provide budgetary comparison information in their annual reports.  An important change, however, is a requirement to add the government’s original budget to the current comparison of the final budget and actual results.”  The District does NOT perform this important and required function.

The District did provide 2019, 2020 and 2021 reports related to budgets.  They appear to have been produced internally.  The first column of numbers is labeled Budget.   The second column is labeled Amended Budget.  There are no dates other than the year.  The 2021 report in this grouping is stamped DRAFT multiple times on each page.  When their responses were provided to me, we were 83 days into their current fiscal year and the District had

 not produced a set of reports that would show the income, expense and net position of the District.  No wonder the last financial audit was not completed until the 11^th month of the following year.  There is no evidence provided that the Commissioners discussed these numbers other than having adopted the budget.  As far as the evidence provided herein and included on their website, they passed the budget and then stuck it in a drawer.  The District did NOT provide monthly Balance Sheets as requested to show the net position of the District.  As of the date they provided the report, the District had not produced a year-end Balance Sheet or income statement other than a DRAFT.

The District did provide monthly copies of the Treasurer’s Reports for each month comparing current month, prior month and same month prior year.  The Treasurer’s Reports show the District has an average cash position of nearly $9 million dollars.  However, the reports do not show actual cash vs. investments as is required by GASB rules, State Law and the District’s own investment policy.  The Treasurer’s reports do not show whether or not they are in compliance with their investment policy.  Entities entrusted with public funds must show the institution(s) where the funds are on deposit and that they meet the definition of eligible funds.  They must also show that their depository institution has securities pledged to cover any amount over the FDIC insurance amount which is presently $250,000.  Failure to comply with this legal requirement potentially puts the District’s funds Ie. the Taxpayer’s funds at risk.  Investments in pool funds must meet the definition of eligible funds, but as investments, they are not required to be covered by insurance or securities.  The reports provided made no distinction as to the type of funds or the institution(s) that hold them.

Request 4.  Copies of minutes or other evidence where the Budget was discussed including but not limited to the comparisons of Actuals to Budget.  This includes workshops leading up to and including the minute(s) where the 2020, 2021 and 2022 budgets were formally adopted.

Answer: The District provided minutes of August 15^th 2019 where a Budget workshop was held.  The District provided Agenda and Minutes of the March 15^th 2021 meeting where the Amended Budget was Discussed and approved??  Yet no copy of the Amended Budget was included in the responses.

The District provided Agenda and Minutes of September 8, 2020 where the 2021 Budget was discussed and approved.

The District provided Minutes of the meeting of August 16^th, 2021 where Commissioner Vlasek moved to schedule a Public Hearing to Receive Public Comments on the proposed 2022 budget for Monday August 30, 2021 and for Tuesday September 7^th 2021 to Adopt the proposed Budget.  The District did NOT provide Minutes or Agenda to show if or when the 2022 Budget was adopted.

Summary:  The District provided 119 pages of reports in response to the Open Records Request.  The readers of this analysis of these reports should be alarmed.  The District does not, in the ordinary course of business, provide reports that is tax-paying public can have any confidence that their funds are in good hands.  Keep in mind that none of these reports provided exist on their website or the archives of the website which otherwise covers back to the 1950’s.  Transparency does not exist.  And one final thought:  The District sits on nearly $10 million in cash and investments which is 3 years cash coverage of their average annual expenditures.  That is at least 6 times the cash to expense ratio held by all other governmental agencies in Aransas County.