If a preliminary draft audit holds up, Luzerne County government has essentially cleared its $8 million deficit.
County Budget/Finance Division Head Brian Swetz told council Tuesday the new draft audit estimated the county ended 2017 with a $7.9 million surplus.
“It’s a great number — almost wipes out the deficit,” Swetz said during the work session.
But county officials can’t celebrate yet because the audit won’t be finalized until overdue Children and Youth financial data is reviewed — a task targeted for completion in August, officials said.
Swetz said the figures from a past audit changed by $1.4 million when the final version was released.
“There could be a big swing with Children and Youth,” Swetz said.
Council Chairman Tim McGinley emphasized this point during the meeting, saying the potential for revised numbers is greater because Children and Youth has a nearly $40 million budget.
“Again, I will caution that draft numbers are draft numbers,” McGinley said.
Clearing the deficit that’s been on the books for several years would be a significant financial step because any surplus funds could be kept in a savings account instead of being swept away at the end of each year for deficit reduction.
“We would have a true reserve,” said McGinley.
The surplus stemmed primarily from one-time revenue windfalls — debt refinancing savings and the settlement of baseball franchise litigation with Lackawanna County.
Spending on daily operations was “pretty close to on par,” Swetz said.
County Manager C. David Pedri, who was not at Tuesday’s meeting, said the preliminary audit report “looks very good.”
“We’re cautiously optimistic as we wait for the final numbers. We anticipate taking a major bite out of the deficit,” Pedri said Tuesday afternoon.
Pedri had informed council in May the audit would not be completed by the home rule government’s June 30 deadline due to Children and Youth financial-record issues. The delay was troubling, he said at the time, because he was proud to release two on-time audits as manager.
The administration was alerted months ago that Children and Youth records needed by outside auditors were not “up to speed,” he had said. The administration quickly dealt with personnel issues in the office and assembled a team of staffers and outside auditing helpers to work overtime in a failed attempt to meet the deadline.
Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.