Harrisville accepts FY2024 audit after auditors note 36 journal adjustments and an internal-control finding

HARRISVILLE — Harrisville City Council voted unanimously to accept the fiscal year 2024 independent audit after the city’s auditor said the financial statements required about 36 journal entries and one internal-control finding.

The auditor, Rob, told the council the firm issued an unmodified opinion after making adjustments to the statements and that the adjustments did not leave material misstatements. "In a nutshell, we gave you an unmodified opinion," Rob said. He added that the audit required roughly "36 journal entries that need to be done for your financial statements." The council then moved and voted to accept the audit.

The auditor highlighted several notable items in his presentation. He said the city issued two bonds in the last two years, $6,000,000 for a public works building and $9,000,000 for a new city hall, and that construction-in-progress increased the city's capital assets. He reported approximately $3,000,000 in cash and noted restricted bond cash held for designated projects. Rob also cited a net pension liability of about $542,000, and said the city's overall governmental net position rose roughly $1.4 million compared with the prior year.

Rob pointed to problems with reconciliations and recordkeeping that produced the internal-control finding. He described issues in prepaid assets, accounts payable subledger reconciliation to the general ledger, fixed-asset variances and some debt accounting items. He said some of the variances required reclassification entries rather than substantive errors in revenue recognition. "We had a lot of variances that we noticed as we were doing the audit," he said. "We had to adjust capital assets. We had to adjust payroll accruals and so forth."

City staff and council discussed the staffing impact after the finance director left the position. Council and staff praised the interim work by Jill, who the auditor said "stepped into a role that she wasn't hired to do." Rob recommended training and short-term outside assistance to address the reconciliations and month-end procedures; he offered to return in late spring to review 2025 close-out procedures and suggested outside contractors or a part-time experienced government finance hire as options.

The auditor also reviewed fund-level details: the general fund's unassigned fund balance equaled about 33.99% of general fund operating revenues, which he noted sits near the top of the 5–35% range described in state guidance for fund balance policy; the capital projects fund had a planned loss as bond proceeds funded construction; and proprietary (enterprise) funds generally were close to breakeven. He said the garbage fund received an $84,000 transfer during the year to address a previously negative balance and recommended continued monitoring of contractor fees.

Council members asked about resources and next steps. Rob said his firm audits many municipalities and can offer training and referrals; he described a prior engagement in which he helped another city remove a material weakness within a year. Council then approved a motion to accept the audit report; the motion passed with all voting in favor.

The council did not adopt additional formal corrective actions at the meeting beyond accepting the audit and directing staff to pursue training and options for outside support. Rob and staff said they will finalize the draft audit report and correct any typographical errors before issuing the final report.

The audit presentation and acceptance took place during the council's regular meeting; the council moved on to other agenda business after the vote.