State Auditor Yost plans stress tests for counties, cities

By David Skolnick | March 30, 2011 at 12:08a.m.

Ohio Auditor Dave Yost

YOUNGSTOWN

Ohio Auditor Dave Yost plans to conduct “stress tests” of the state’s 10 most-populous counties and cities to determine whether they are heading toward significant financial problems.

On that list would be Mahoning County, the state’s 10th-largest county in population, and Youngstown, Ohio’s ninth most-populous city.

Yost told The Vindicator on Tuesday during a one-hour meeting that the program would be in place in a couple of months.

“It’s designed to be an early-warning system,” said Yost, a Republican who’s served as auditor since January.

The auditor’s office would review annual audits and other financial information, dating back to 2007, of 20 areas to determine if counties and cities are heading down a bad financial path, Yost said. If that’s happening, Yost wants to offer his office’s services to help resolve those problems.

Though the particulars of the program still need to be finalized, Yost said his office will look at certain criteria including debt- service payments as a percentage of total revenue, spending compared with total income, and general-fund surplus as a percentage of general -fund revenue.

Where it is necessary, Yost also will urge counties and cities to have performance audits — a more complete examination of finances than annual audits — done to improve operations.

For every dollar spent on a performance audit, $24 can be saved, on average, if the recommendations in the report are implemented, Yost said.

Performance audits can be expensive, Yost acknowledges.

That’s why Yost said he supports a bill approved by the Ohio House that advances the cost of a performance audit to an entity.

The county/city would have one year to repay the state for the cost of that audit, he said.

The Ohio Senate is expected to approve the legislation later this week, Yost said.

“Most local governments are running tight this year, and next year looks tougher,” he said in explaining why now is the time to conduct “stress tests.”