Ohio auditor Dave Yost last week put Akron on a fiscal caution status, marking the first time the state has used the new criteria.
Akron suffered deficit fund balances in 2009 and 2010, according to the auditor’s office. It also has negative cash fund balances, it has appropriated funds that exceed resources, and it has failed to properly certify estimated resources, Yost said.
The auditor told a local newspaper that the city has undertaken capital projects without any revenue in hand to pay for them. Mayor Don Plusquellic said the city would make changes to comply with the auditor’s concerns.
The fiscal caution status was created earlier this year when lawmakers passed a law to give cities and towns a preliminary warning before a declaration of fiscal watch or emergency. Before the new law, only school districts were allowed to be placed on fiscal caution status.
Yost expects “a burst of entities that end up in fiscal caution,” according to local reports.
Akron has 60 days to submit a plan to correct the problems that led to the fiscal caution flag, including a way to eliminate its deficit fund balances, the auditor’s office said.
