Columbus – Lack of progress by the City of Portsmouth (Scioto County) to correct its financial problems prompted Auditor of State Dave Yost today to elevate the city’s status from fiscal caution to fiscal watch.

“This is a real disservice to taxpayers,” Auditor Yost said.  “The process has two parts: coming up with the plan and then following through on it.  Sitting on the recovery plan does nothing but allow the city’s fiscal condition to worsen.”

Upon the declaration of fiscal caution, the city was required to submit a recovery plan to address its fiscal issues.  The Auditor of State’s office reviewed the written proposal and determined that the plan was acceptable on February 29, 2012.  On November 30, 2012, the Auditor of State’s office notified the city that it had made very little progress on correcting or eliminating the issues that prompted the fiscal caution declaration.

The City of Portsmouth must now submit a new financial recovery plan within 120 days of today’s declaration designed to identify the actions that will be taken to correct its financial problems, as well as a 5-year financial forecast.  If the city is unable to submit an acceptable recovery plan, fiscal emergency will be declared and a financial planning and supervision commission would be appointed.

Technical assistance is available from the Auditor of State’s office to city officials to aid in addressing their financial concerns.

The City of Portsmouth was placed in fiscal caution on November 22, 2011 based on the city’s 2010 audited financial statements.  The audit included various noncompliance issues with Ohio law, significant deficiencies, and material weaknesses.  The audit report disclosed that the city’s general fund had a deficit fund balance of $530,043 at December 31, 2010.  The city’s municipal court grants and rural AIDS state grant special revenue had deficit fund balances of $9,482 and $10,332, respectively.  In addition, Portsmouth’s insurance fund was owed $426,000 by other city funds.

A full copy of this fiscal watch declaration may be accessed online.

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The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,600 state and local government agencies.  Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.

Contact:
Carrie Bartunek
Press Secretary
614-644-1111