Clarifying Swain County commissioners’ budget, hiring process
Crawford expressed concerns about the animal shelter at the Feb 3 meeting.
From YouTube
Swain County commissioners held a Feb. 3 work session with updates about animal shelter funding and the interim county manager. But since neither process was explicitly spelled out to the public, audience members may have left with remaining questions. Here’s a breakdown of some potential questions.
What happened regarding the labor cost of the animal shelter? Did commissioners do anything wrong?
Many Swain residents have become suspicious of a common budgeting practice — expensing, rather than capitalizing, internal project labor — likely because of how it’s been framed. Governmental Accounting Standards Board policy indicates that “internal labor costs can be capitalized, if they are specifically identifiable and directly related to the completion of the project.”
In other words, capitalizing internal work is not a requirement, and the ability to do so is largely dependent on labor tracking throughout the construction process. Swain County, like many other municipalities, does not categorically document hours spent on each job.
During the public forum segment of the Feb. 3 work session, Whittier resident and county commission candidate Fred Crawford said, in a plea that the commissioners reconsider the practice of expensing internal labor, that “State law and basic government accounting rules say when we build something like that, we’re required to count everything it took to build it, materials, construct contractors and yes, the labor cost, even if our people did the work.”
As interim county manager Lottie Barker clarified during the meeting, the labor cost for the animal shelter has already been recorded under a separate maintenance line item.
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Vice Chairman Tanner Lawson told The Smoky Mountain News that salaries and benefits of four staff charged with building the animal shelter were budgeted under the “maintenance — special buildings” category, with a yearly total of $351,000. Because the animal shelter took 28 weeks to build, the labor expense for that building would round out to $189,000.
While the Office of the State Controller notes that, for capital assets, “cost should include all charges necessary to put the building or structure in its intended state of operation,” a line Crawford cited in his initial letter to commissioners, it’s a best practice recommendation rather than a policy requirement.
Crawford raised concern about the loss of transparency when commissioners don’t include every expenditure when calculating the cost of an asset. Still, he said “I’m here asking you to fix a mistake and make sure we don’t keep repeating it,” insinuating that commissioners had erred, perhaps to the letter of the law.
Commissioners didn’t make a mistake — nor did they violate any Governmental Accounting Standards Board policy.
What matters isn’t as much what the county chooses to capitalize, but if it stays consistent to its own internal policy. Expensing labor is a longstanding Swain practice — one that has consistently generated clean independent audits. Any non-compliance would’ve been flagged by an auditor in one or more of these statements.
Finally, Crawford said that “undervaluing [assets like the shelter] can decrease the credit rating of the county.” But whether a municipality capitalizes internal labor has no effect on credit rating — or much of anything at all. Ratings mainly factor in audit findings, risk management, pension plan contribution, contingency operations, debt management and long-term financial strategy.
Lottie Barker’s resignation from county manager becomes effective Feb. 14. Why has she been reappointed for a three-month interim period?
Two considerations informed Barker’s extended tenure: training and recruitment. State statute dictates that the county manager seat must remain filled, even during a transition or hiring process. The new appointee must be onboarded before beginning official duties, which can take weeks to complete. Commissioners have already pushed back the timeline.
“We reopened the application process once we found out that we were able to work with the North Carolina Association of County Commissioners,” Lawson said.
Indeed, assisting commissioners with management transition is one of the key services the organization offers, and it isn’t uncommon for county boards concerned with their own bandwidth or strategy to turn to the NCACC for help facilitating the process. In Swain County, commissioners voted nearly unanimously to seek the group’s guidance.
The NCACC won’t make the hiring decision, but Lawson said the agency’s involvement will relieve commissioners of the more tedious responsibilities that, in total, turn the hiring operation itself into a full-time job.
“That being said,” he continued, “we won’t be able to have a county manager in place until after [Barker’s] date of leaving.”
That left Swain commissioners with few options — either to find a seasoned government employee willing to serve three months or negotiate with Barker to stay a little while longer.
Lawson told SMN that commissioners agreed on two residents with the skillset to carry out the former. The first declined. The second was willing to commit to three months, but when the board realized this person had also filed an application for county manager, they rescinded the offer.
“We want to be able to leave them as a candidate, let them be able to be a part of the interview process,” he said.
So commissioners talked through an extended employment period with Barker. She’s currently working full time but on Feb. 13 will switch to part-time hours that will continue until the end of her term.
Lawson said the board has received well over 15 applications, in comparison to only 12 candidates when Barker was initially vying for manager.
“My first meeting after I got elected, we appointed [Barker], and the previous board sat on those applicants for over eight months,” he said. “So that process wasn’t done, in my opinion — this is my opinion — wasn’t done correctly. I don’t want that to happen. I want us to use all the resources we can to make sure we get the right person in there who can help our county go forward.”
