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State of Rhode Island General Assembly
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Auditor General completes audit of state’s financial statements for Fiscal 2021
STATE HOUSE – The state’s fiscal 2021 operations were significantly enhanced by better-than-expected tax collections and receipt of unprecedented amounts of COVID related federal assistance. Fund balances and net position of the primary government were largely improved. Fund balance of the General Fund totaled $897 million at June 30, 2021 an increase of $509 million - $374.4 million is available for future appropriation.
The Office of the Auditor General completed its annual audit of the State of Rhode Island’s financial statements for the fiscal year ended June 30, 2021 which included these fiscal 2021 operating results. The
Independent Auditor’s Report
, prepared by Auditor General Dennis E. Hoyle and included in the State’s Annual Comprehensive Financial Report (ACFR), is unmodified, indicating that the financial statements present fairly the financial position and changes in financial position of the State of Rhode Island in conformity with accounting principles generally accepted in the United States of America. The results of the required annual audit of the state’s financial statements are directed to the Finance Committee of the House of Representatives and the Joint Committee on Legislative Services – those vested with official oversight of the annual audit.
The ACFR is prepared by the State’s Office of Accounts and Control - Department of Administration and includes financial information on the funds and accounts of the state for the fiscal year ended June 30, 2021. It also includes comprehensive government-wide financial statements, which present the changes in the state’s net position inclusive of the capital assets and other long-term assets and liabilities.
Government-wide net position (governmental activities) totaled $163.8 million—an increase of $787.4 million which eliminated the prior year net deficit of $623.7 million. $4.0 billion represents the state’s net investment in capital assets. $709.4 million is restricted for specific purposes leaving an unrestricted net deficit of $4.6 billion.
The budget reserve (“rainy day”) account totaled $228 million at June 30, 2021, and was nearly restored to the maximum statutory balance after a $120 million appropriation in the prior year. $149.8 million is available in the RI Capital Plan Fund for future capital projects. $120 million was specifically appropriated to the RICAP fund in fiscal 2021 and expenditures totaled $38.1 million.
Unemployment insurance benefits totaled $2.3 billion in fiscal 2021. Significant amounts of benefits paid have been deemed fraudulent and the state continues to quantify those amounts.
In fiscal 2021, the state expended $967.6 million of the $1.25 billion of federal Coronavirus Relief Fund. Federal American Rescue Plan Act funds totaling $1.13 billion received by the state in fiscal 2021 were pending programming and were reflected as unearned revenue.
Fund balance of the IST Fund, which accounts for transportation activity, decreased $104.6 million to $265.8 million largely due to the spend-down of debt proceeds for transportation projects.
Long-term liabilities, including bonds payable and net pension and OPEB (retiree healthcare) liabilities of the primary government, totaled $7.4 billion at June 30, 2021.
Net pension liabilities included in the 2021 financial statements (governmental activities) totaled $3.7 billion which represents the combined liability for six defined benefit plans covering State employees and the State’s proportionate share of the net pension liability for teachers - $1.4 billion.
Five defined benefit plans (covering state employees) are managed as trusts by the Employees’ Retirement System of RI - the pension liability is net of amounts accumulated for future benefits. An additional plan covering certain judges is managed as a pay-as-you-go plan – no amounts have been accumulated for future benefits - annual benefit payments are appropriated each year.
The state made employer contributions totaling $327 million in fiscal 2021 to the pension plans including $112.6 million as the state’s share for teachers. The net investment return on assets within the defined benefit pension plans was approximately 25.6% for fiscal 2021. Assets of the defined contribution plan, part of the overall hybrid pension benefit structure, totaled $1.6 billion at June 30, 2021.
Six defined benefit OPEB plans provide retiree healthcare benefits for state employees including certain electing teachers and Board of Education employees. Net OPEB liabilities totaled $345.4 million, which is net of amounts accumulated for future benefits at the measurement date. The funded status of the OPEB plans is improving — the largest plan covering most state employees increased from 33.6% to 42.5% at June 30, 2021. For three plans, a net OPEB asset results from plan assets exceeding the OPEB plan liabilities by $11.2 million. Employer contributions to the OPEB plans totaled $43.6 million in fiscal 2021. The net investment return on assets within the OPEB trusts was 25.5% for fiscal 2021.
Other communications resulting from the annual audit will include findings and recommendations related to the state’s controls over financial reporting and the
Single Audit Report,
which focuses on the state’s compliance with requirements related to federal assistance expenditures. The
Single Audit Report
is required by federal law and is provided to federal funding agencies as a condition of continued federal assistance.
is available on the website of the Office of Accounts and Control, Department of Administration. A link to the report is provided below:
2021 State of Rhode Island ACFR 6.30.21 (ri.gov)
The Auditor General’s website includes an
Annual Comprehensive Financial Report – Highlights
document that summarizes key state financial operating results for fiscal 2021. A link to the ACFR - highlights is provided below:
For more information, contact:
Dennis E. Hoyle, CPA
, Auditor General
Office of the Auditor General
Providence, RI 02903
401.222.2435 ext. 3038
Lt. Governor's Office
Secretary of State
Link to Public Records Request
Informational Briefing on Pensions