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Berlin, Ocean Pines News Worcester County Bayside Gazette Logo Berlin, Ocean Pines News Worcester County Bayside Gazette


Berlin audit shows warts-and-all books

When auditors issue an “unmodified opinion,” as PKS & Company did after its analysis of Berlin’s books for the last fiscal year, it is not an indicator of financial seaworthiness.

All it means is that the financial statements the auditors examined were clean and accurate, and matched the firm’s own findings. In short, the auditors are attesting to the fact that town’s financial staff tracked the income, expenses, assets and liabilities according to the rules of accounting.

That’s good, because it means the town’s financial statements are honest and the public can believe them. This warts-and-all honesty, however, also shows where Berlin fiscal circumstances aren’t as good as they need to be.

One concern is that the town has just enough money in reserve to cover its operating costs for three months. That’s one month above minimum amount recommended by the Gov- ernment Finance Officers Association.

Understanding that an unrestricted fund balance significantly greater than that might spur taxpayers to accuse government of over-taxing, it remains that the town depleted its general fund cash by subsidizing its money-losing sewer operation.

That’s the other thing the town will have to address — recovering that $3.4 million it took from the general fund to prop up the sewer utility, which suffered mightily from rates that were far below cost.

But the good thing about honest accounting is that it also shows how Berlin government has reacted to its recent difficulties: it took in more revenue this past fiscal year and reduced spending. That’s a big positive that continues in the current budget and will be a driving force in future budgets.

Further, the new sewer rates, like them or not, will have a major impact on recovering that loan, and help restore balance to the, well, balance.

The one thing residents can count on because of the town’s straightforward financial reporting is that they can follow the budgetary progress that officials have promised to make. As PKS’s unmodified opinion shows, the Town of Berlin is hiding nothing.