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West Miami audit issues: unmodified opinion, adjusting entries and long-running interfund balances
Summary
The city's fiscal year 2024 financial statement audit returned an unmodified opinion; auditors reported material adjusting journal entries tied to a new accounting system implementation and noted a roughly $3 million net interfund liability (about $9 million owed across funds). Auditors also flagged a required budget amendment that was not made.
The independent audit of the City of West Miami's fiscal 2024 financial statements returned an unmodified opinion, but auditors reported material adjusting journal entries tied to the city's recent accounting system implementation and a technical finding that a budget amendment was not posted after year end.
Jerry Linantes of GMRT, the engagement partner on the audit, told the commission, “the report has an unmodified opinion, that indicates that the statements are presented fairly in all material respects.” He said staff and auditors encountered challenges related to the city's new accounting system that required a number of adjustments; those adjustments are the basis for a finding requiring remediation.
Linantes also described a technical compliance finding: expenditures exceeded budgeted totals in places and a formal budget amendment was not filed within the 60-day period following fiscal year end as required by local rules. He said staff have discussed the adjustments and the finding with the audit team and are working to clear the item for next year.
On the city's internal balances, auditors and staff discussed interfund liabilities. Linantes summarized: “the net amount is about 3,000,000, but the amount that's owed to other funds is about 9,000,000.” City staff said the larger figure represents cumulative transfers and supplements from the general fund to enterprise accounts over many years, largely to cover water and sewer shortfalls; managers said the pattern has been addressed in the current year and is expected to decline as the water enterprise becomes self-supporting.
Auditors reported no single-audit compliance findings for the major federal program tested (ARPA) and two state projects examined. The audit presentation included discussion of capital investments the city has made, and management said capital spending is expected to produce future operating benefits.
The commission heard the audit report during its July 9 meeting and thanked finance staff for closing the audit; Jerry Linantes and the audit team remained available to work on corrective items with staff in the coming months.
