KING WILLIAM — Financial experts have raised concerns over King William County’s finances amid confusion about how much money is left following its budget for fiscal year 2026.
King William, like many other local authorities in Virginia, has a policy of maintaining a fund balance of at least 20% of its general fund expenditures to avoid economic downturns and unforeseen events. But the county currently doesn’t know how much it has in that account.
Julie Kaylor, a consultant with the Berkley Group who is serving as the county’s interim financial director, has been reconciling the FY26 budget following the resignations of the former county administrator and finance director in the summer. She is working with new auditors — the accountancy firm CLA.
The county’s fund balance has emerged as a major concern. Kaylor told the Board of Supervisors last week that she has no idea how much the county has in unassigned balances.
The county has faced numerous financial issues in recent years. Last October, former finance director David Wilson criticized the previous auditors and called for a “forensic audit” of the county’s finances. He highlighted issues such as uncashed checks, missing assets and incorrect reimbursement of compensation board employees. The forensic audit never took place.
The county has seen rapid staff turnover in its finance department, with a new finance director expected this week.
On Oct. 27, Kaylor told the board that the need to clarify the meaning of unassigned fund balance is a recurring issue.
“There continues to be questions around what unassigned fund balance represents,” she told the board. “Your total fund balance is basically your equity. It’s the sum of everything left over at one point in time after all your assets and liabilities have been factored in.”
She referred to 20 or 30 general funds on the county’s cash balances sheet. “Those are all individual ways of accounting for certain functions,” she said. Kaylor said she found a line item referring to an unassigned fund balance that contained just over $2.7 million.
“That is not fund balance. That is a portion of cash that is sitting aside … I have not been able to find any reason for that money sitting aside,” Kaylor said.
She presented a reconstructed budget for FY26 but flagged the lack of institutional knowledge in the finance department because of the rapid staff turnover and inaccurate filing of documents.
Kaylor and fellow Berkley Group consultant Clarence Monday, the interim county administrator, recently met with resident and small businessowner Chris Couch to compare their analyses of the county finances. “While we were close in our numbers, our numbers didn’t match,” Kaylor said.
Kaylor flagged unaccounted expenditures dating back to the FY25 budget that depleted county fund balances.
“When a budget is level funded year over year and the expenditures are not trued up, you are literally spending fund balance … the bad part about that is it’s not transparent to you or the public,” she told the board.
“When we are talking about the amendments we are looking at for this current year, we are trying to right that situation; we are trying to make sure that you are all looking at all of the expenditures,” she said.
“We can’t keep kicking the can down the road. Legally, we’ve really got to get the budget corrected so that we can move forward,” Kaylor said.
The Board of Supervisors will discuss amendments to the budget on Nov. 17. A public hearing is likely because the changes exceed 1% of expenditure. “Right now, you still have fund balance,” Kaylor said. However, she was unable to give a figure to the board.
“We are well below our 20% unassigned fund balance …It should be around $7 million, and we are at about $2 million,” Supervisor Mary Sue Bancroft said.
Monday told the board a fund balance of $7.2 million was the figure provided in last year’s audit and may have changed.
Monday said counties spend heavily in the late summer and fall. “It’s extremely important for everyone to keep in mind that a locality’s got to have sufficient cash flows so as we can meet our obligations during the fiscal year,” Monday said.
“You can’t just come up with that number in five minutes,” he said. “It takes the auditors months to compute a fund balance.”
In August, the Board of Supervisors granted Kaylor additional pre-audit support after she warned that the failure to complete tasks such as reconciliations could delay the audit by CLA, leading to increased findings and higher audit costs.
Couch said he is worried about King William’s financial position but said it’s too early to make a prediction on the fund balance.
“While I continue to have concern, it’s too early to say definitively whether the unassigned fund balance will fall below the 20% threshold outlined in the county’s financial policy or if there is a reserve held for the KWCPS (King William County Public Schools) expense. If unassigned fund balance does fall below 20%, that will likely be reflected in the FY26 results,” he wrote in an email Sunday.
“King William County’s ongoing budget troubles aren’t just a matter of accounting — they’re the result of years of weak oversight, inconsistent reporting, and failed management,” Couch added. “The current board has continued many of the same practices that created this instability and has yet to produce a clear plan to correct them.”
David Macaulay, Davidmacaulayva@gmail.com
https://www.pilotonline.com/2025/11/03/king-william-faces-new-financial-concerns/
