Grain Valley receives clean audit; sales tax, reserves strengthen city finances

The City of Grain Valley received a clean independent audit at the Board of Aldermen meeting, with the auditor saying the city’s financial statements were “presented fairly, in all material respects.” The auditor, Butch Beeman of Trout Beeman and Company, presented the audit and highlighted increases in cash and net assets and the retirement of debt.

The auditor’s report — an unqualified opinion — is the highest level of assurance an independent auditor can offer. “It’s called an unqualified report, but it’s very much a clean report,” Beeman told the aldermen, and he encouraged officials to review the management’s discussion and analysis that accompanies the financial statements.

Beeman said unrestricted cash on the government-wide statement was about $25,000,000, roughly $350,000 more than a year earlier, and that sales tax revenue was up about $400,000, or 9.3 percent. He cited a $2,560,000 retirement of governmental debt during the fiscal year and said proprietary (business-type) funds increased about $211,000 while general government net assets increased about $3,300,000.

The auditor described the firm’s procedures — confirmations with banks, invoice testing, covenant and compliance checks, and interviews with management — and told the board there were no disagreements with management, no difficulties performing the audit and no evidence of “opinion shopping.” “Steven and your finance team did a very good job preparing for, organizing, and being responsive to our request for information,” Beeman said.

The audit letter also describes required planning assessments of audit risk, including areas auditors consider inherently risky such as improper revenue recognition or management override of controls; Beeman emphasized those are standard professional procedures, not findings that the city had experienced such problems. “That doesn’t mean the city has those risks,” he said, explaining the firm documents and evaluates them as part of planning the engagement.

The presentation noted required disclosures in the notes to the financial statements and called out collateralization of cash deposits in compliance with state statute; Beeman reported that the city’s cash was adequately collateralized. He also summarized debt covenant testing and said the city was in compliance with bond covenants, including rate covenants for utility funds.

No board action was required for the audit presentation beyond the discussion. The auditor offered to provide follow-up answers to questions outside the meeting and thanked staff for their cooperation.

City finance staff and aldermen praised the results during the presentation. The audit documents, including the management’s discussion and analysis and the auditor’s communication to those charged with governance, were left with the board for review.

Less-critical details: the auditor suggested the board consult the management’s discussion and analysis for narrative and graphical context to supplement the financial statements; that document was prepared by city staff and is positioned at the front of the audit package.