External auditors give Detroit a clean FY24 opinion but flag year‑end adjustments and five federal‑award findings

Plant Moran, the City of Detroit—s external auditor, told the Budget, Finance and Audit Standing Committee that it issued an unmodified — or "clean" — opinion on the city—s fiscal year 2024 financial statements, while also reporting internal control deficiencies and several findings in the single audit of federal awards.

The opinion and accompanying letters were presented to the committee by Plant Moran partners Ali Hejazi and Stacy Reeves and by Manju Pudnaik, who summarized single‑audit testing. "We have issued an unmodified or clean opinion," Hejazi said, describing that result as the highest level of assurance auditors can provide on a set of financial statements.

The nut graf: the clean opinion means the city—s consolidated financial statements are presented in accordance with accounting requirements, but the audit identified areas where processes and controls should be strengthened. Auditors reported one internal control deficiency related to journal entries and year‑end adjustments that were significant enough collectively to be categorized as a material weakness. In the single audit of federal awards, auditors tested seven major programs representing roughly 91% of the city—s federal expenditures and reported five findings; Plant Moran noted there were no questioned costs related to those findings.

Details and context: Auditor General Laura Goodspeed opened the presentation and noted the ACFR and single audit have been published on the city—s website. Plant Moran said the journal‑entry issue arose during the close and audit process when auditors identified adjustments that needed to be made to the city's closed trial balance; in total, auditors reported 17 adjustments for fiscal 2024 (nine newly identified, eight recurring from prior years). Hejazi and Reeves said the number of reported findings has declined since 2019 but that the year‑end adjustment finding is the most persistent because it requires no audit adjustments be identified to be resolved.

On pension and the general fund, the auditors highlighted a significant increase in required pension contributions: fiscal 2024 included the first full actuarial contribution after the city—s plan of adjustment, and Plant Moran estimated the increased pension payment accounted for the majority of a roughly $148 million rise in development and management category expenditures. Auditors and committee members noted the growth in pension contributions, coupled with increased general fund subsidies to some enterprise operations, as a budgetary pressure to watch in coming years.

Single audit: Manju Pudnaik said the team tested seven major federal programs, including pandemic‑related State and Local Fiscal Recovery funds and newly tested programs such as HOME and FEMA. The single audit produced five findings focused on compliance and internal controls; none required returning funds to federal agencies, Plant Moran said.

Questions and follow‑up: Council member Gabriela Santiago Romero asked where members could get more detail; Plant Moran and the Auditor General said the ACFR and single audit are posted online and the full financial statement report runs several hundred pages. The Auditor General and Plant Moran told the committee they will continue following up with the Office of the Chief Financial Officer and departments on corrective actions. Goodspeed told members the Auditor General—s office plans additional memos and follow‑up work examining ARPA programs and the risks that arise when ARPA funding winds down.

Action: The committee voted to receive and place the auditor general—s Plant Moran audit reports on file (motion carried; no objections recorded).

What this means next: The city will post the full ACFR and single audit on detroitmi.gov and the Auditor General and administration will work on corrective‑action plans to address the journal‑entry and single‑audit findings. Auditors emphasized that while the opinion is clean, the remaining internal control issues and the city's increased pension obligations are fiscal matters the council should monitor during the budget and revenue‑estimating process.

Ending: The Auditor General and Plant Moran stood ready to provide detailed pages of the reports and answer follow‑up questions; committee members asked for additional analysis of pension and program risks ahead of the upcoming revenue estimating conference.