Luzerne County’s outside auditor delivers positive fiscal report

Luzerne County’s outside auditor delivered a favorable fiscal report during a recent council work session briefing.

Remi Omisore, a principal with CLA (CliftonLarsonAllen), said his company’s audit of 2024 county finances detected no material weaknesses or significant deficiencies, such as findings or internal control concerns.

A frequent point of interest is the fund balance, Omisore said.

The Government Finance Officers Association (GFOA) historically advises governing bodies to keep a fund balance that would cover at least two months of expenses, and the average in CLA’s experience is three months, he said.

The county ended 2024 with a $27 million fund balance, which equates to approximately 2.8 months of expenses, he said.

“That is right in line where the GFOA likes you to be,” Omisore said.

Fund balances are “open to interpretation,” with varying opinions on whether more or less should be held in reserve, he added.

Omisore expressed a positive opinion on the state of the county’s fund balance, which applies to the general fund operating budget.

“From an audit standpoint, that is the sweet spot that we like to see. It gives you some room for flexibility, and, if unforeseen circumstances present themselves, gives you some leverage both on the expense side and the revenue side,” he said.

He also highlighted the employee pension fund liability, or the gap between assets and liabilities.

The liability decreased $10.9 million, with a reduction from $106.1 million the end of 2023 to $95.2 million the end of last year, his presentation said.

At the end of 2024, the employee pension fund held approximately $321.6 million in assets and was 77% funded, he said.

Omisore said CLA typically observes a funded status of 78% to 80% across the country, which means this county is “right in line.”

He noted the audit was an “unmodified” opinion, which is the “highest level of assurance we can give you.”

“It’s basically the gold standard in auditing and says the financial statements are free from material error,” he said.

Council Vice Chairman Brian Thornton, who chairs council’s Budget, Finance and Audit Committee, thanked Omisore for the presentation.

“I think it was a great report card on the county,” Thornton said.

Thornton emphasized the shrinking pension fund liability, saying it was due to strong performance on investments.

“So if there was any question out there, the pension fund is doing great, and the liability number came down significantly,” Thornton said.

He asked Omisore if there were any major concerns regarding county finances, and the auditor said no.

CLA met the county home rule charter’s June 30 deadline to complete the audit.

The charter requires council to change auditors at least every four years, and 2024 was the first year of CLA’s engagement.

As previously noted, the audit indicated the county owed $130 million in outstanding debt at the end of 2024, compared to $151.2 million the previous year.

Based on the repayment schedule, the county will free up approximately $26 million annually after the debt is repaid in 2030.