Our auditing firm Reddish and White completed our fiscal year 23/24 audit in early December. The City Council must approve the findings and city corrective actions before the audit is transmitted to the State. If our audit is not submitted to the state by 15 January 2026, the Joint Legislative Auditing Committee may choose to withhold state sales tax apportionment payments from the city.

The full audit, attached as “Keystone Draft 3”, is 56 pages long and summarizes the financial status of the city. However, there are only two key findings by our auditor that need to be addressed as we move forward in future fiscal years. They are findings 001 and 002. Both findings and the city response to the findings, taken from the attached “FY23/24 Audit Response Letter,” are pasted below for review.

Finding 2024-001: Updating the Accounts Receivable at Year End. The determination of the

unadjusted balance by customer of the accounts receivable was not accurate.

Background: The accounts receivable is adjusted at the end of each year from the cash basis

to the accrual basis. By not starting with an accurate listing by customer, the final annual accrual

adjustments are made more difficult to determine. Our audit testing disclosed a customer whose

balance was not reflected properly after the City's accountant made the final adjustments to the

receivables at year end.

Recommendation: Establish controls to ensure the detail by customer of the accounts

receivable is properly maintained at year end.

Response 2024 - 001: We will establish controls to ensure the detail, by customer, of the

accounts receivable is properly maintained at year end.

Finding 2024-002: The Actual Expenditures Exceeded the Final Budgeted Expenditures of the

General Fund

Background: No action was taken during the year to amend the budget to better reflect actual

results. As a result, the $49,358 excess in actual expenditures over budgeted expenditures was noted.

Recommendation: Establish internal controls to ensure that the budget is compared to actual

expenditures and amended in a timely manner to better reflect actual results and ensure all calculations

are reviewed for accuracy prior to approval of budgets.

Response 2024 - 001: We have already established internal controls, to include monthly

Budget and Finance Committee Meetings, to ensure that the budget is compared to actual

expenditure. We will amend the budget in a timely manner to better reflect actual results and

ensure all calculations are reviewed for accuracy prior to approval of budgets.

City Council approve the audit findings, city response letter, and the Management Representation Letter, and authorize the City Manager to release the audit to the state.