Village receives ‘clean’ 2019 fiscal year audit report

By Jim Newell

Review Editor

The Village of Lake Orion received an unmodified, or clean, independent audit report from its auditing firm during a presentation at the council meeting on Monday.

The audit report was for the 2019 fiscal year, covering July 1, 2018 through June 30, 2019. Andrews, Hooper and Pavlik (AHP) presented the annual audit report.

The unmodified opinion is the highest level of assurance an audit firm can give, said Gregory Soule, auditor for AHP.

There was one “material weakness” – a deficiency or combination of deficiencies in internal control such that there is a reasonable possibility that that a material misstatement of the village’s financial statements will not be prevented, or detected and corrected, on a timely basis, according to the report.

The “material weakness” was in regard to the village’s watermain replacement project, an issue Soule referred to as a “hiccup” that the auditors had to mention in the report.

Village Manager Joe Young said a payment to the contractor’s performing the work had not been posted in the year-end reporting at the time of the audit and the entry has been corrected.

Fiscal year 2018-2019

At the end of the fiscal year, the village had $622,971 in unassigned general fund balance; a public works fund balance of $106,186; a police fund balance of $127,604; and an “other governmental funds” balance of $733,382, for a total governmental funds balance of $1.59 million.

Other governmental funds include the parking, street and cemetery funds.

The village collected $1.065 million in property taxes for the general fund; $314,454 for the police fund in the 2018-2019 fiscal year.

Total revenues were $1.575 million for the general fund; $143,617 for public works; $535,357 for police; $336,121 for other governmental funds for total of $2.590 million in revenues.

Total expenditures for the year were $877,030 for the general fund; $462,457 for public works; $873,542 for the police; and $328,722 for other governmental funds for total expenditures of $2.541 million.

Overall, the village’s net position increased by slightly more than $214,000, including $143,000 in the general fund, across all governmental funds.

“So, that’s very good to see,” Soule said, noting that the village did not have any overages in any category after budget adjustments.

“Everything is in good order and we’re in a good financial position,” village Manager Joe Young said. “And the goal is to keep improving.”

Enterprise fund

In the Enterprise Fund: Water and Sewer, the village had total current assets of $3.109 million. Plant, property and equipment assets were valued at $15.017 million; however, with $7.611 million in accumulated depreciation, the adjusted net for plant, property and equipment is $7.406 million. Total assets were $10.756 million.

Current liabilities (including $301,882 in the current portion of bonds payable) were listed at $716,095. Long-term liabilities, which includes bond payments, were nearly $3 million, for a total liability of $3.669 million.

The village’s total net position was $7.086 million, according to the report.

Young said the village will have a $245,000 payment on the bond for the watermain replacement project in the current fiscal year. The village is in the process of updating its watermains and has a 20-year bond to pay for the improvements.

“We haven’t started paying on the bonds yet,” Young said.

DDA

The Downtown Development Authority’s fund balance at the end of the fiscal year was $519,000.

The full audit report is available at Village Hall, 21 E. Church St., for review during business hours.