State auditor issues clean opinion on Clare County finances; board discusses fund-balance target and July budget schedule

Roxanne Foster, senior auditor with the Michigan Department of Treasury, told the Clare County Board of Commissioners on June 16 that the county's 2024 financial statements received an unmodified opinion.

Foster said an unmodified opinion — commonly described as a “clean” audit — indicates the statements were prepared in accordance with state and federal guidelines and “present fairly stated numbers that they could be relied upon.” She recommended the board consult the management discussion and analysis section of the audit report for a high-level overview of county finances.

The auditor added that governmental funds showed a modest increase in net position year over year and that the county’s business-type activities, including delinquent tax revolving and transit, also gained net position. Foster noted some long-standing audit deficiencies remain, including auditor assistance in preparing government-wide financial statements, a small deficit at the end of the year in one special revenue fund (the front-of-court fund), and expenditures recorded in excess of appropriation tied mainly to capital classification issues. She said the county is working on a uniform chart of accounts but that it was not fully implemented at audit date.

The audit matters came during the board's administrative reporting. The county administrator also told commissioners that the county has a balanced preliminary 2026 budget and that a draft capital improvement plan is under review. The administrator said the general fund began the fiscal year with about $5 million and ended with about $5.9 million, and that total county net position increased roughly $500,000 year over year.

Why this matters: An unmodified opinion supports the county’s ability to rely on audited financials for borrowing, grant applications and budgeting. Commissioners used the audit briefing as the starting point for setting fiscal policy targets and timing.

Commissioners pressed staff about establishing a formal fund-balance policy. The administrator said staff would draft a proposal; participants discussed potential targets. One board member said a 50% target was desirable but unrealistic, and other comments suggested 35% or a commonly cited 30% floor. Staff proposed returning a drafted policy for board review at a future meeting.

On scheduling, the board set a special meeting for budget review on Monday, July 14 at 9 a.m., with the intent to hold any required public hearing and consider adopting the 2026 budget at the regular July meeting after line-by-line review or to adopt following the special meeting if appropriate.

Commissioners also heard reports about external fiscal risks. During administrative remarks members cited state-level proposals that could raise county costs — including bills that would require bargaining over minimum staffing levels for public employees and a proposal to raise hazardous waste and landfill tipping fees. Commissioners and staff noted possible cuts to Medicaid and other state or federal funding streams that could reduce support for community mental health and other services, and discussed the board’s ability to make budget adjustments after October 1 if revenues fall short.

The county's retirement plan was noted as an item staff will present later: a representative from Municipal Employees' Retirement System (MERS) will attend an upcoming meeting to compare plan options for new hires and provide updated actuarial detail.

Ending: Foster encouraged commissioners to review the first pages of the audit report — the management discussion and analysis — for a concise summary and invited board members to contact her office with follow-up questions. Staff said a draft fund-balance policy and a capital-improvement plan with equipment-replacement schedules will be circulated before the next meeting.