Mount Pleasant auditors issue clean opinion, cite material weaknesses in bookkeeping and grant policy

Mount Pleasant city officials received a mostly unmodified audit opinion for fiscal year 2024 but were warned of material internal-control weaknesses and incomplete federal grant procedures.

The city’s external auditors told the Mount Pleasant City Commission on July 28 that, after adjustments, “the financial statements present fairly in all material respects the financial position of the city,” an unmodified opinion that, if finalized, should qualify the city for the Government Finance Officers Association certificate of excellence, auditor Doug said.

Why it matters: The unmodified opinion reflects that the year-end numbers tie out after audit adjustments, but auditors flagged control problems that the commission must address. The audit also triggered a single-audit review because the city recorded federal ARPA grant revenue in 2024.

Key findings and figures - Journal entries and bank reconciliations: Auditors reported two items as material weaknesses: “the amount of journal entries we had to…post” and “the cash balance not being reconciled on a timely basis,” Doug said. He told commissioners the audit team had posted many corrective entries and that today alone he had posted about eight. He estimated “close to 60 or 70 journal entries that had needed to be completed just for the 1 cash account.” - Audit timing and process: The audit deadline was extended from June 30 to July 31 to allow completion of reconciliations; recent adjustments were incorporated into the draft statements, Doug said. - Fund balances and large projects: On the governmental funds balance sheet, unassigned fund balance in the general fund was reported at about $11,200,000 at year-end, roughly 60% of annual expenditures, Doug said. The enterprise (clean water) fund showed construction in progress of just over $30,000,000 funded primarily by bonds, State Revolving Fund draws and some ARPA-related grant revenue. - Federal funds and single-audit scope: Auditors said the city received just over $10,000,000 in federal grant dollars during 2024 (largely ARPA funds). The single-audit report identified one finding related to the absence of written federal grant policies; auditors said staff turnover had delayed creating the required policy. - Budget variances: The audit included routine budget-to-actual reporting and disclosure of some overspent line items that must be reported to the state; auditors said none met the threshold for state action but were disclosed in footnote 2.

Commission reaction and next steps Finance staff and auditors said they expect to complete the audit and file by July 31. City staff acknowledged significant turnover in the finance office during 2024 and said new finance leadership is working to close gaps; the finance director said she will “double check” prior years and correct issues going forward.

Auditors recommended stronger month‑end processes and written policies for federal grants. The commission pressed for follow-up, and staff said education and final reconciliations would be completed for the current fiscal year to prevent a repeat of the 2024 timing issues.

What the audit does not say The audit team said they did not find evidence of fraud; auditors described the issues as accounting and reconciliation problems tied to staff transition and timing. Auditors also noted expanded audit scope to include Government Auditing Standards (Yellow Book) testing and a single-audit over federal programs.

Ending: The draft report will be finalized after staff and auditors complete the final tie-out; commissioners requested staff return with written steps and timelines to remediate the material weaknesses and to adopt a formal federal grant policy.