KNIGHTDALE — The town’s annual financial audit showed a healthy, thriving town with two small problems: purchase orders with late dates and inconsistent keeping of grant money.
The Cary-based accounting firm who completed the audit, Joyce and Company CPA, said both problems were small. Small as they may be, the issue with grant money affects a hefty portion of the town’s total revenue.
Knightdale’s audit showed the town netted the same amount of revenue – 34 percent of the town’s total – from property taxes as it does from grants and other contributions.
The audit reported the town gets $5,421,563 from property taxes and $5,398,541 from grants and donations.
The town received two donations of land that factor into that number: a $63,000 piece of land from the Cheswick subdivision that will become a park and $2.4 million worth of sidewalks and right-of-ways from the Churchill subdivision. There were also some smaller cash donations.
The town’s total revenue for the fiscal year was $15,791,698.
According to Knightdale finance director James Overton, property taxes usually take up about 50 percent of the town’s total revenue. Last year, because of projects like Knightdale Station Park, Mingo Creek Greenway and improvements to First Avenue, the town’s grant money spiked.
“In a normal year, we wouldn’t get nearly as much grant money,” Overton said.
Problems with documentation
When Knightdale receives a grant for a project, the town fronts the money and the grant is a reimbursement for the money they’ve already spent on a project.
To receive the reimbursement, the town has to provide the granting agency documentation that the money has been spent.
The audit said some of these grant reimbursements weren’t being filed timely and consistently. The disorganization in the town’s system of keeping track of grant money caused one grantor to be overbilled for a grant reimbursement.
The audit conceded that the town had received several grants over the audit period, but said the town staff wasn’t prepared to handle the number of transactions that were tied to the grants.
Overton said it was an unusual year for the town in how much grant money it received, but he said the town has already taken steps to better handle grant documentation.
The town will now file reimbursements on a quarterly basis rather than at the end of the fiscal year. It should help avoid mistakes and it will help with the town’s cash flow, Overton said. With quarterly reimbursements, the town will spend smaller amounts of money and then be reimbursed rather than spending a year’s worth of money and waiting for reimbursement.
The audit noted Knightdale doesn’t have a grant specialist on staff to help manage and analyze grant activities, but Overton said the town probably will not need one.
Each department handles their own grant applications. Large construction grants go to the Public Works Department.
The year was busy and the town was lucky, but Overton said he suspects Knightdale won’t receive quite as many grants in the coming years.
“The agencies that give out these grants have to spread the wealth around,” he said. “We have gotten more than our fair share of grant money.”
Overton said next year might have similar grant activity, but he expects it to drop off by 2015. By then, the town will have completed the Mingo Creek Greenway and sidewalk construction on Smithfield Road, which are some of the larger projects funded by grants.
Hankerson: 919-829-4826; Twitter: @easternwakenews