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City auditor issues clean opinion; two internal-control recommendations noted
Summary
An external auditor told the Escanaba City Council the 2024 financial audit received an "unmodified opinion" with no formal findings, while flagging two internal-control recommendations related to documentation and IT policies.
An external auditor presented Escanaba's fiscal-year 2024 audit to the City Council on Jan. 16, saying the firm issued an unmodified (clean) opinion on the city's financial statements.
The auditor, Paul Matz of Raymond, told council members the audit found the city's financial statements "accurately stated in all material respects" and that there were no audit findings for the year. He said changes in pension actuarial assumptions reduced the city's net pension liability and materially improved the city's net position compared with 2023.
The auditor said the general fund ended the year with a fund balance of about $6.8 million and that most enterprise funds (electric, wastewater, water) saw increases in net position. "Overall, the audit from our perspective went very well," Matz said. "What we have issued is called an unmodified opinion." He added the pension liability reductions were a large piece of the improvement.
Matz said the audit did identify two internal-control recommendations — not formal findings — that management should address. One recommendation called for better evidence of independent review and approval for certain journal entries and some credit-card transactions; the second recommended the city consider documenting IT security policies and best practices. "There were a few items that did not include document of independent review and approval," he said, and he urged management to review IT security policies.
Council members questioned the audit-related materials included in the packet. Matz clarified that the representation letter sent with the audit materials is a standard, boilerplate document in which management affirms it provided all information needed for the audit.
The presentation closed without further action; council members thanked the auditor and staff for their work.
