Columbiana Port Authority Converts to Cash-Basis Accounting
EAST LIVERPOOL, Ohio — The Columbiana County Port Authority is converting from accrual to cash-basis accounting, its fiscal officer, Tad Herold, and executive director, Penny Traina, said Monday.
The port authority, a quasi-governmental for-profit entity, is following the recommendation of the state auditor’s office, Diane L. Ksiazek, manager of administration and finance, said afterward.
The state auditors were to be on site this month to begin their scheduled review of operations for the of 2016-17 audit.
Converting to a cash-basis accounting eliminates the need to adhere to new GAAP – generally accepted accounting practices – requirements that don’t benefit the port authority and should save the entity some $2,000 in yearend paperwork, she said, besides making it easier for the public to read the financial statements the port authority files.
The school districts and counties in Ohio use cash-basis accounting, Ksiazek noted, as does the Jefferson County Port Authority.
The main difference between cash-basis and accrual accounting is the timing of when income and expenses are recognized. The cash method accounts for revenues only when the money is received and for expenses only when payments are made. Accrual recognizes income and expenses when they’re billed and earned.
The conversion to cash-basis accounting should be complete in two to three months, Herold told the board. In his cash-basis statement for January, Herold showed receipts of $150,885 and disbursements of $100,692 for a net change in fund cash balance of $50,193 and a fund cash balance of just more than $4.2 million at Jan. 31.
Of the conversion, Traina told the board, “This has been a long time coming” and should keep the auditor from citing deficiencies in their reports with recommendation to correct them.
Since becoming executive director last March, Traina has been reviewing all port authority procedures and contracts to ensure all is working as it should and to reduce expenses. To that end, she obtained a resolution to enter a corporate credit card contract with Farmers National Bank for her use and that of Ksiazek.
The Farmers credit card, which charges no annual fee, will replace the American Express corporate credit card, which carries a $450 annual fee, Traina noted.
The board approved contracting with NAI Spring Commercial Real Estate Services, Canton, to help Traina market the 80 undeveloped acres in World Trade Park outside Leetonia.
And the board approved hiring Bricker & Eckler LLP, Columbus, as additional legal counsel. Services the law firm provides will be paid at $175 an hour unless a partner works on the matter, in which case the port authority will be charged $285 an hour, Traina said. The port authority will not pay a monthly or annual retainer.
Copyright 2022 The Business Journal, Youngstown, Ohio.