Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Municipal Finance topic
No spam. Unsubscribe anytime.
Auditor: Kearney caught up on audits, now holds fixed-asset records; reserves equal about six to seven months of operations
Summary
An independent auditor told the Board that Kearney's fiscal 2023 and 2024 reports were completed on a modified cash basis, fixed-asset records were recovered from a prior auditor, reserves are healthy (roughly six to seven months of general fund operations) and several legacy record issues remain under cleanup.
Trout Beeman & Company presented the independent audit results for the fiscal years ending March 31, 2023 and March 31, 2024 and told the Board the city is now current on its audited financial statements.
Mike Grozek, the CPA who led the presentation, described the city's financial statements as prepared on a modified cash basis, explained that the firm recovered fixed-asset records from the prior auditor and said those records have now been entered into the city's accounting system. "You are now the proud owner of 2 audits, 2023 and 02/2024," Grozek told the board.
Grozek highlighted several items the board should note. Because of turnover and issues with the prior auditor's record-keeping, the city elected to present statements on a modified cash basis while staff caught up on fixed-asset and year-end accrual entries. He noted the city recorded debt related to interchange and developer agreements that affected unrestricted net asset presentation and that some developer obligations will be paid over time.
The auditor said an under-collateralized deposit situation in fiscal 2023 affected roughly $300,000 of the city's $21 million cash position; that condition was corrected for 2024. Grozek emphasized that the city's general fund reserves are sufficient to cover roughly six to seven months of operations, a level he described as a conservative and healthy position for a municipality of Kearney's size.
The presentation also covered operational changes during the period. The city separated its water and sewer into distinct proprietary funds in 2024 for clearer management reporting; staff also resolved system conversion issues and worked to reconcile meter and asset records. There were no new debt issuances in 2024 and the city made progress on developer obligations, which declined compared with the prior year.
Board members asked clarifying questions about the under-collateralized deposits and the auditor explained how deposits over FDIC limits require bank collateral. The auditor said the 2023 shortfall was an oversight and that staff addressed the issue in 2024. The firm provided a set of management comments and suggested the city implement several cleanup items over the next fiscal year.
The audit presentation concluded without formal board action; the reports were presented to the board and will be published in the city's financial records.
