2025 Annual Comprehensive Report

During the fiscal year 2025, actual expenditures exceeded appropriations at the legal level of budgetary control in the Employee Risk Retention fund and is out of compliance with North Carolina general statutes. This over expenditure was due to rising claim costs in the fund. Management is aware of this variance and is implementing procedures to ensure compliance with appropriation limits in the future by improving expenditure monitoring and increasing rates for participants and the City’s annual contributions. Additional funding sources will be added as necessary in the future. B. Deficit Fund Equity The following funds report deficit fund balances as of June 30, 2025:

Workforce Investment Act

$

(644,870) (3,897,754) (125,764) (3,812,026) (38,044,329)

State, Federal and Other Grant Funds State and Federal Grants (ARRA) Employee Risk Retention Fund Solid Waste Management Fund

The project fund deficits are from current expenses that were incurred at the end of the fiscal year but reimbursement had not yet been received from the federal and state agencies and other City funding. These project fund deficits will be eliminated with the future reimbursements of federal and state grants. The Employee Risk Retention Fund deficit is due to rising claim costs and more paid claims than expected. This deficit will be eliminated with increased employer/employee health premium contributions and changes in health plan design. The Solid Waste Management Fund deficit is due to required accruals to record liabilities related to landfill closure and post-closure and pollution remediation. The deficit will be eliminated as these activities are completed over a 30-year period from date of closure of landfill cells. IV. Detailed Notes on all Funds A. Deposits and Investments 1. Deposits All deposits of the City of Greensboro are either insured or collateralized by using one of the two methods. Under the Dedicated Method, all deposits that exceed the federal depository insurance coverage level are collateralized with securities held by the City’s agents in the City’s name. Under the Pooling Method, which is a collateral pool, all uninsured deposits are collateralized with securities held by the State Treasurer’s agent in the name of the State Treasurer. Since the State Treasurer is acting in a fiduciary capacity for the City, the deposits are considered to be held by the City’s agent in the City’s name. The amount of the pledged collateral is based on an approved averaging method for non-interest bearing deposits and the actual current balance for interest-bearing deposits. Depositories using the Pooling Method report to the State Treasurer the adequacy of their pooled collateral covering uninsured deposits. The State Treasurer does not confirm this information with the City or the escrow agent. Because of the inability to measure the exact amount of collateral pledged for the City under the Pooling Method, the potential exists for under collateralization, and the risk may increase in periods of high cash flows. However, the State Treasurer of North Carolina enforces strict standards of financial stability for each depository that collateralizes public deposits under the Pooling Method. The City does not have a formal investment policy regarding custodial credit risk for deposits. At June 30, 2025, the City’s deposits had a carrying amount of $1,462,996 and a bank account balance of $5,381,659. $341,457 was covered by federal deposit insurance and the remainder was covered by the collateral held under the Pooling Method. At June 30, 2025, the City had $82,963 cash on hand, included in the carrying amount above. Additional deposits of $91,593 were held with local banks for the Better Building program.

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