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City auditor reports FY2024 results: reserves about $400,000; federal compliance and segregation-of-duties comments noted
Summary
Independent auditors reported the results of the fiscal year ended June 30, 2024: the city set aside roughly $400,000 for capital and stabilization reserves, utility operations are stronger, and auditors issued routine internal-control and bank-collateral comments but no federal compliance findings for tested programs.
City auditors presented the fiscal year 2024 (year ended June 30, 2024) audit results to the Alba City Council and the council voted to accept the audit.
Andy Cromer, CPA with HSPG and Associates, told the council the city has established two reserves — a capital reserve and a stabilization reserve — that together total roughly $400,000, or about one month of the city’s annual general-fund revenue. He said the general fund itself has minimal direct reserves because the city has been funneling funds into those two established reserves. “Collectively, the city has set aside about $400,000 collectively for both of those,” Cromer said.
On utilities, the auditors found a stronger operating picture: utility operating income increased and the authority raised rates by about 4–5 percent, and the utility also received a $1 million forgivable loan from the regional water board that increased available funds.
Cromer said auditors issued a routine internal-control comment common to small organizations — a segregation-of-duties observation that reflects limited staff size — and two additional comments in a one-page management report: (1) the city should update written policies and procedures to ensure compliance with federal-award requirements (the city had more than $750,000 in federal awards in FY2024, triggering additional testing), and (2) bank collateral for deposits must meet state requirements (the auditors identified a compliance gap where a bank used out-of-state school district obligations to secure deposits instead of the allowable Oklahoma obligations). Cromer said staff and auditors are working with the bank to resolve the collateral issue.
The auditors said federal-program testing (including a roughly $900,000 water-board pass-through federal program) found no compliance findings. Cromer recommended updating some policies and procedures related to federal-award management and vendor/purchasing controls if the city continues to receive significant federal funds.
Council then moved to accept the audit. The motion to accept the FY2024 audit results passed by recorded roll call.
Council also later authorized the mayor or city business manager to sign an engagement letter with HSPG and Associates to perform the next year's audit.
Council members and staff acknowledged the audit work and the need to keep addressing internal-control limitations and updating written policies where federal-award obligations exist.
