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Lansing council approves 2024 audit after firm reports clean regulatory-basis opinion
Summary
Adams Brown LLC presented the City of Lansing’s 2024 audit, reporting an adverse GAAP opinion but an unmodified opinion on the city’s regulatory basis; council voted to approve the audit with a recommendation to clarify federal procurement and grant policies.
The Lansing City Council voted to approve the city’s financial audit for the year ending Dec. 31, 2024, after staff from Adams Brown LLC presented the report and answered questions.
The audit presentation by Alexis Crispin, senior audit staff at Adams Brown LLC, outlined two opinions in the Independent Auditor’s Report: “an adverse opinion on US Generally Accepted Accounting Principles” and an “unmodified opinion” on the city’s regulatory basis of accounting (the basis used to prepare the city’s budget). “For that regulatory basis…the unmodified opinion…essentially means that your financial statements were materially correct,” Crispin said.
Why this matters: an unmodified opinion on the city’s regulatory basis indicates the numbers align with the accounting method Lansing uses for budgeting and reporting to its regulators; an adverse GAAP opinion reflects that the audit was not performed on GAAP basis, which Crispin said the city waives annually. Crispin also noted the city was not classified as a low-risk auditee because it does not perform its audit on a GAAP basis and had not had single audits in both prior periods.
Key figures and findings from the presentation included an increase in unencumbered cash from about $7,000,000 at the start of the year to roughly $11,000,000 at year-end; principal outstanding debt reported as $29,535,000; and federal expenditures of about $1,800,000 that required a single-audit schedule. Crispin summarized fund movements that affected cash balances — for example, the general fund decreased about $588,000, while capital improvements saw an increase of roughly $714,000.
Crispin said auditors found no material weaknesses or significant deficiencies in internal control and no findings in the compliance testing of major federal programs. She recommended one non-reportable improvement: updating city policies to more clearly reflect federal requirements for procurements, grant management, and conflicts of interest when federal dollars are involved. “We recommend that the city's policies be updated to more clearly reflect information required by federal statute for procurements, grant management, and conflict of interest,” Crispin said.
Council action: The council made a motion to approve the final audit for the year ending Dec. 31, 2024; the motion passed on roll call.
Next steps and context: Crispin said she sent a management representation letter to Beth (city staff) for signature so the firm can submit the audit to state and federal clearinghouses. The governance letter accompanying the audit reported no difficulties encountered during the audit and no disagreements with management.
The audit presentation and council vote were part of the council’s regular meeting agenda and followed questions from council members about fund specifics and single-audit requirements.
