Audit committee accepts Safety Harbor annual financial report, flags delayed bank reconciliations

The Safety Harbor Audit Committee voted unanimously to recommend that the City Commission accept the City of Safety Harbor annual comprehensive financial report (CAFR) and the Community Redevelopment Agency (CRA) financial statements for the fiscal year ended Sept. 30, 2023.

CliftonLarsonAllen auditor Julie Ballard told the committee she issued unmodified opinions on both the city and CRA financial statements and an unmodified opinion on the city's compliance with Florida Statute 218.415, the statute governing investment of public funds. Ballard said auditors did identify a material weakness in internal control related to the timeliness of bank reconciliations: several reconciliations were delayed, in some cases by about six months, following staff turnover in 2023. She said the finance department has since supplemented staffing and brought in additional resources to bring reconciliations up to date.

The auditors also reported that the city implemented a new accounting standard this fiscal year for cloud-based computing arrangements (commonly referred to as SBITA). Ballard said that implementation affected the city's statements but did not affect the CRA because the CRA did not have software arrangements subject to the new guidance. The auditors reported no unusual accounting estimates or policies and said management provided the required representation letter.

During the presentation, Ballard described the audit scope as including the financial statements and certain internal-control evaluations and noted that auditing standards require reporting any material weaknesses or significant deficiencies identified during the audit. She said auditors perform an examination of compliance with Florida Statute 218.415 and, for CRAs, a set of CRA-specific procedures from the Auditor General's compliance supplement; in her opinion, the CRA complied with those requirements for the year ending Sept. 30, 2023.

Committee members moved to approve minutes from the Dec. 18, 2023 meeting and then to accept the CAFR and the CRA reports. Both motions passed by recorded voice vote, 7-0. The audit committee's acceptance is a recommendation to the full City Commission; the CRA board (the City Commission acting as CRA board) will consider acceptance at its meeting following a short recess.

Committee members also recognized longtime Finance Advisory Board member Elizabeth Wadsworth, who was attending her last meeting after not seeking reappointment; members thanked her for years of service to the board.

The audit report and governance letters will be placed on the commission and CRA meeting agendas for formal acceptance and any further action.