Independent state audit says R.I. has strong financial result in fiscal 2023

THE STATE HAD strong operating results in fiscal year 2023, according to an audit of the government’s financial state by the R.I. Office of the Auditor General. Pictured is the R.I. Statehouse. / PBN FILE PHOTO/CASSIUS SHUMAN

PROVIDENCE – The R.I. Office of the Auditor General has completed its audit of the state government’s financial state for fiscal 2023 and says it indicated that the state had strong operating results that year.

The annual audit, prepared by Auditor General David A. Bergantino, concluded that tax revenue, while slightly reduced compared with fiscal 2022, remained solid, according to a news release issued by the General Assembly. Also, expenditures “remained comparable” to the prior year as the state continued to utilize pandemic recovery funds, the news release said.

This coming fiscal year could be quite different. Legislators have expressed concern about the shrinking amount of recovery funds and potentially the shrinking amount of tax revenue in fiscal 2025. State officials have warned that budget deficits may return.

Those issues weren’t apparent in the fiscal 2023 audit.

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The balance of the state’s general fund totaled $1.2 billion on June 30, 2023, an increase of $209.5 million, with $412.3 million available for future appropriation. The “rainy day” account totaled $271 million on June 30, 2023. A supplemental budget reserve account was statutorily created in fiscal 2023, totaling $6.5 million on June 30, 2023.

Federal revenue exceeded $5 billion in fiscal 2023. Federal revenue relating to the State and Local Fiscal Recovery Fund increased by $230.5 million over fiscal 2022 in support of expenditures for a wide array of pandemic recovery initiatives throughout state government. In addition, federal revenue relating to the Education Stabilization Fund increased by $95 million over the prior year as local school districts utilized their funding allocations.

The R.I. Lottery transferred $434.7 million in net income to the General Fund in fiscal 2023 as compared to $388.6 million in the prior year.

Unemployment insurance benefits totaled $154.7 million in fiscal 2023, a decrease of $296.3 million from fiscal 2022, which was the last year for pandemic-expanded unemployment benefits.

The state’s Capital Plan Fund reported $998.5 million available for future capital projects, and $427.9 million was transferred to the fund from the General Fund, including a fiscal 2023 appropriation of $257 million for future capital projects. Expenditures in the fund totaled $81.6 million in fiscal 2023.

The R.I. Department of Transportation expended $649.8 million on infrastructure projects and maintenance programs. Infrastructure expenditures accounted for $449.1 million.

The two largest infrastructure projects were the northbound Interstate 95 Providence viaduct and the Route 6/10 interchange project with expenditures totaling $52.7 million and $26.4 million, respectively.

Transfers of gas tax revenue from the Intermodal Surface Transportation Fund to the R.I. Public Transit Authority in fiscal 2023 totaled $41.9 million, consistent with the prior year.

The notes to the financial statements reported continued litigation regarding the state’s RhodeWorks tolling program, which was suspended in September 2022 and the closure of the I-195 Washington Bridge westbound span deemed no longer safe for public use.

The outcome of these issues will significantly impact future revenues and expenditures relating to the state’s transportation infrastructure, the Office of the Auditor General said.

The independent auditor’s report, prepared by Bergantino and included in the state’s Annual Comprehensive Financial Report, is unmodified and indicates that the financial statements present fairly the financial position of the state of Rhode Island in conformity with generally accepted accounting principles.

The results of the annual audit are given to the House Finance Committee and the Joint Committee on Legislative Services.

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