LEFA audit shows rising unrestricted net position; two findings remain

Maynard Costerison presented the Lansing Entertainment & Public Facilities Authority (LEFA) year-end financial statements for June 30, 2024 to the Committee of the Whole on Jan. 27 and issued an unmodified opinion.

The auditors reported rising unrestricted net position for LEFA, up to about 37% of expenditures in 2024 after multi-year increases. Operating revenues rose from approximately $6.5 million in 2023 to about $7.4 million in 2024, the firm said; the largest drivers were increased food-service sales and higher interest revenue. Auditors also said nearly $2 million in state grant dollars for Lansing Center and Jackson Field improvements were recognized during the year as related expenses were incurred.

Maynard Costerison identified two findings on LEFA: a material weakness related to audit journal entries and a compliance finding concerning the timeliness of sales-tax remittance to the state. The auditors said two prior-year findings had been corrected by management's actions during the year (bank-reconciliation timeliness and receipt review).

Audit staff said some of the material journal entries were tied to recognition and classification for the new grant and to ensuring deferred revenue remained on the balance sheet until earned. Concerned council members asked whether the findings were one-offs or likely to recur; auditors said the sales-tax remittance finding could be corrected by timely remittances, while some journal-entry issues related to grant accounting and therefore were more technical in nature.

The auditors thanked LEFA management for cooperation and said they had no disagreements with management during the engagement.