Halifax County commissioners Monday tabled a request from the public health system to return what the department describes as its fund balance, a total of $6,013,570, that was allocated to the county’s general fund.

Halifax County Attorney Glynn Rollins disagreed with the use of the term fund balance during the meeting, saying no department in county government has a fund balance.

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It was Commissioner Sammy Webb who called for a motion to table the matter on a second from Gary Redding so the board could get further clarification on legal and any personnel issues that could arise from the issue.

At issue, public health system Director Cheyanna A. James said in a June 20 memo to the board, county management, Rollins, and the clerk, is a formal request to return to the health department a cumulative $6,013,570 that had been reallocated to the county’s general fund through the following budget amendments:

May 1, 2017 — $1,117,493

May 22, 2023 —  $2 million

February 3 — $2.5 million

Total — $5,617,493

Added to that total is a budget amendment that was identified on April 7, 2014 which brings the total sought by the health department to $6,013,570. 

James wrote that the request is supported by state general statute GS 130A-39-G, which says, "A local board of health may impose a fee for services to be rendered by a local health department, except where the imposition of a fee is prohibited by statute or where an employee of the local health department is performing the services as an agent of the state." 

The statute further states that fees collected under the authority of this subsection are to be deposited to the account of the local health department so that they may be expended for public health purposes in accordance with the provisions of the Local Government Budget and Fiscal Control Act.

In a consolidated agreement — Section K — it is stated that  earned revenue — officially classified as local funds — must be budgeted and spent in the program that earned it unless otherwise noted in the respective agreement addenda. "A local account shall be maintained for unexpended earned revenues — such as Title XIX fees, private insurance, or private pay cash.” The accounts are to be maintained in sufficient detail to identify the program source generating the fees.

The document notes that in 1999 an attempt was made by former County Manager Charles Archer to transfer local health department funds to the county's general fund and was met with a directive invoking this statute, causing him to return the funds to the agency. 

James told the board that former County Manager Matthew Delk had also “made an attempt to take funds from the local health department. As a result of a letter from the state, he never ended up taking those funds.”

Timeline

In the memo James wrote to the board and staff she noted that the same would be true with the identified budget amendments removing earned cash from the local health department to deposit in the general fund of the county.

March 17 — Budget meeting between the health director and assistant health director who is also the department’s finance officer with county management, a $2.5 million budget amendment was questioned and the state statute was provided.

April — A Munis accounting system entry for an expense to the health department for $2.5 million was identified.

April 28 — The health director and assistant health director met with county management to resolve the inquiry based on the general statute. A new methodology for calculating year-end revenues reveals the health department has been making money for the past 20 years. “Our agency will use the new methodology moving forward.”

April 28 — A board of health meeting was held to share the expense added to the department’s books, the general statute, and a new method “that shows we have been in surplus.”

The board of health directive was given to share this information with the board of county commissioners.

May 27 — A board of health meeting was held with the county manager and finance director present to facilitate this new methodology and answer any outstanding questions. Board members agreed that the $5.7 million should be returned to the health department based on the general statute.

A unanimous vote directed the health director to bring this information to the board of county commissioners. Additional directives included the review 20 years of county audit books to determine the true fund balance running total with the new methodology in alignment with internal books.

In reviewing the county audit books, there was also an additional entry made by finance in FY 2013-2014 to the health department's general fund for $396,077. 

Upon further research, a budget amendment was identified on April 7, 2014, which shows the removal of excess cash from the health department to the county's general fund. “This would bring our new cumulative total to $6,013,570.”

Says the memo: “In our review of the Halifax County audit books, we determined that our running fund balance total ending in FY 24 should be approximately $13.5 million. Current projections of the fund balance today are relatively $5.9 million, which would mean that we have discovered half has been removed from our earned funds.”

She said in closing that, “As the safety net provider for Halifax County citizens, we have the responsibility of meeting the health needs of our community and being ready to respond appropriately to any public health threats. Through this discovery and the reallocation of funds, we can begin exploring new ways to meet the community where they are with the innovative ideas we have, unfortunately, been delaying due to the assumption that we have been losing money. Considering the current threat to public health funding across the state, I implore you to make public health a priority in the requested action for all citizens of Halifax County.”