By Joseph Goral
Staff Writer
jgoral@mihomepaper.com
LAKE ORION — Lake Orion’s Village Council received their annual audit presentation from auditing firm Andrews Hooper Pavlik PLC partner Greg Soule during their regular meeting on Jan. 13.
The presentation covered the 2023-24 fiscal year which ended June 30.
Overall, Soule said the firm had an “unmodified opinion,” meaning the financial results within the audited financial statements represent the underlying activity.
“That was an unmodified opinion of the governmental activities, the business type activities, which is the water sewer fund, each major fund, the discreetly presented component unit, or the DDA, and the aggregate remaining fund information of the village,” Soule said.
While several new accounting standards were implemented for the village relating to changes and error corrections, Soule said the firm did not encounter significant difficulties or consult outside accountants during the process.
Soule said, coincidentally, errors were identified rolling thorough the current-year revenue account for the water and sewer fund billings. Ultimately, it overstated prior-year receivables, an estimate of unbilled accounts at year-end, by around $572,000. The error was corrected and prior year financial statements were restated, according to Soule.
The village’s government-wide total net position is $9.8 million, governmental activities have a net position of $3.31 million and business type activities have a net position of $6.57 million. Total net position for the village increased on a full-accrual basis by $488,000. This was divided into the governmental activities increase of $523,000 and a business type activities decrease of $35,000.
Key statistics for the general fund were also identified, including a fund balance of $1.279 million – $1.276 of which is unassigned. The unassigned fund balance represents roughly 61% of general fund expenditures, plus transfers out for an annual basis.
“You’ll also want to consider future projects when you look at that in terms of the overall fiscal health of the general fund,” Soule said.
The other governmental fund balance’s total is $4.1 million, with an overall increase in the general-fund fund balance of $455,000. Soule added the pension is 61% funded and other post employee benefits are 21% funded.
The village has no funds in a deficit fund balance.
Two items were considered to be material weaknesses. The first was related to water and sewer records referencing the error listed above and differences in rates between what council approved and what was charged to some account holders, according to Soule.
The second related to the village’s accounting for capital assets, but has since been corrected.
Soule also identified three significant deficiencies in internal control – one relating to reviewing journal entries, another related to an unrecorded DDA bank account discovered during the current year and a significant deficiency around approvals of purchase orders.
“A new purchase order system was implemented this year, and some of those approvals didn’t quite make it into the system,” Soule said.
There are also upcoming accounting standards related to compensated absences and more that will impact the village, but Soule nor the meeting’s agenda packet did not provide further details.