Georgetown, Del., Jan. 26, 2010: An independent audit shows Sussex County ended the 2009 budget year in better financial shape than what had been forecast earlier in the year, thanks largely to sweeping reductions that narrowed the multi-million-dollar gap between expenditures and revenues.

Sussex County Council, at its Tuesday, Jan. 26, 2010, meeting, accepted the Audited Financial Statements for Fiscal Year 2009 from Jefferson, Urian, Doane & Sterner, P.A., Certified Public Accountants. The auditors released an unqualified report noting that the financial statements “present fairly, in all material respects, the respective financial position” of Sussex County as of June 30, 2009.

The audit report is presented annually to detail the County government’s finances in the previous fiscal year. The latest report shows Sussex County’s financial numbers are accurate and meet generally accepted accounting standards.

For Fiscal 2009, Sussex County ended the budget year with a $1.9 million deficit, the third in as many years, the audit shows. Yet, that’s actually better-than-expected financial news compared with what loomed a year ago.

In January 2009, the midpoint of the fiscal year, the County was faced with a nearly $8 million shortfall for the remainder of the 2009 fiscal year. To counter that, County Council approved numerous reductions, including suspending capital projects, parking County vehicles, not filling vacant positions and freezing non-essential overtime, all of which eventually helped pare the deficit by about 75 percent.

“You never want to operate in the red, but looking at the positive side, this is the smallest of the deficits we’ve experienced in the past three years,” County Finance Director Susan M. Webb said. “And, just as important to note, it’s much better than what we could have been left with had the County not taken immediate action last year. Hopefully the County is turning the corner to better financial days.”

The report shows the continuing effects of the slumping economy, particularly in the housing sector. One of the most significant sources of revenue for the County’s general fund in recent years, the realty transfer tax, continued its downward slide, netting $13.6 million, a decrease of $7 million, or 34 percent, from Fiscal 2008.

County leaders were not entirely surprised by that decrease, though, as they conservatively budgeted $17.9 million for realty transfer tax. Other related revenues, including fees collected through the Recorder of Deeds office, building permits and building inspections, also declined by a total of about $2 million, or 21 percent, from the previous year.

County Administrator David B. Baker said the report reflects many tough choices and plenty of hard work during the past year. “Our staff deserves thanks for their incredible effort in the past year to trim spending,” Mr. Baker said. “And we’re going to continue those efforts as we go through 2010 and as we look ahead to the 2011 budget.”

Meantime, the current budget year is showing some signs of progress. After outlining the audit Tuesday, Ms. Webb also issued a mid-year financial report for Fiscal 2010 that shows modest budget gains are being made. For the six months that ended Dec. 31, the County is up $500,000 in revenue over budgeted expenditures.

Council President Vance C. Phillips said the audit and the latest quarterly figures highlight the magnitude of what has been achieved in the past year. Mr. Phillips said both reports should give taxpayers confidence in the financial health of the County government and how their money is being managed.

“Beginning with the new council that took office one year ago, the timely manner in which the administration is now providing critical financial information to the council and public has allowed everyone to understand the magnitude of our crisis and take immediate and decisive action,” Council President Vance C. Phillips said. “Today we are seeing the fruits of this labor.”

Sussex County will submit the 2009 audit report to the Government Finance Officers Association of the United States and Canada for consideration of its Certificate of Achievement for Excellence in Financial Reporting award. The County has received the award the past seven years. Ms. Webb said she is optimistic the County will receive the same recognition for the Fiscal 2009 audit report.

The complete report and other information will be available on the County’s website at sussexcountyde.gov.

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