State auditors have again cited the Covington County Commission for using restricted funds to cover expenses, but county officials said that operating would be almost impossible if they didn’t employ the practice.

In Sep-tember, Com-mission Chair-man Lynn Sasser an-nounced the audit of the county’s finances did not reveal any findings. He also said that the county ended the year with more than $1 million in the general fund – a feat that county administrator Brenda Petty said she couldn’t “ever remember (the county) doing.”

The official Department of Public Accounts report, which was released Nov. 25 for the period of Oct. 1, 2009, to Sept. 30, 2010, stated the commission did not always follow the provisions of the law regarding the use of restricted funds, resulting in loans being made from restricted funds to funds that are less restricted.

The practice has remained in place since its first citing by auditors in 2006.

The current audit disclosed that the county loaned restricted Federal Emergency Management Agency funds to the gasoline tax fund to purchase materials needed for repairs caused by the March and December 2009 rains.

By way of explanation, Sasser cited the “extensive damage to (the county’s) road and bridge system” for the finding.

He wrote to auditors that the county received substantial funding from (FEMA) to make the necessary repairs; however, all work on FEMA projects must be completed before the commission can recognize FEMA funds as revenue.

“In the future, the commission will try to avoid making loans,” Sasser wrote.

County Administrator Brenda Petty said she argued with auditors and called the finding the “most ridiculous, asinine assumption I’ve ever heard.”

“When the engineer submits project worksheets to FEMA for damages to roads and bridges, we receive a portion of ‘small project’ money in advance,” she said. “Any project estimated to cost less than approximately $64,000 is considered a ‘small project.’

“We don’t get any FEMA money in advance for large projects, but have to complete the work and request reimbursement,” she said. “We only get 85 percent reimbursement on all FEMA projects, so the county has to absorb 15 percent of the cost, which is substantial when there is so much damage.”

Petty said according to records from the county engineer’s office, the county’s received $6.83 million for March 2009’s small projects, and $5.57 million for December 2009’s small projects.

“But we have received $0 on large projects, but have been spending money making the repairs,” she said. “The normal flow of revenue into the Gasoline Tax Fund is not substantial enough to purchase additional materials to repair FEMA damages; therefore, we loaned the FEMA funds to the Gas Tax Fund to pay for materials and equipment to make those repairs.

“The kicker is that the examiners claim you can’t use the FEMA money at all until a project is 100 percent complete,” she said. “The only way I can see to prevent these loans from happening is to have several million dollars in reserve in the Gas Tax Fund with which to purchase the materials needed to make the repairs.

“I could understand being cited on this if we had loaned the money to the General Fund to pay for operations in our office, Probate, jail, etc.,” she said. “But we used it for the purpose it was intended.”