Audit committee forwards sewage disposal systems financial review; receivables and MD&A omissions flagged

The Wayne County Commission—s Committee on Audit voted to receive and file the Office of the Legislative Auditor General—s limited review of the Wayne County Sewage Disposal Systems audited financial statements for the fiscal year ended Sept. 30, 2024.

OAG presenters told the committee that the external auditor issued an unmodified opinion on the sewage disposal systems— financial statements but that the required Management—s Discussion and Analysis (MD&A) was omitted from the supplemental information. Auditors recommended that management include the MD&A in future filings and that the committee receive and file the limited review.

Maxwell Andrews, an OAG legislator auditor, summarized key figures from the review: total assets were reported at approximately $128.1 million as of Sept. 30, 2024; the systems— pool of cash and investments in the county—s internal treasury increased by about $5.7 million from the prior year (from roughly $15.6 million to about $21.3 million); receivables increased by about $5.4 million; and net position rose by approximately $2.1 million. The report noted operating expenses exceeded operating revenues by roughly $500,000 and that certain restricted assets included receivables tied to local units.

Commissioners asked staff for more detail on the increase in receivables and on collection experience from local communities. Jessica Kenyon, representing the county—s finance office, said part of the increase in receivables appeared to be deferred revenue from two communities that left the system and pre-paid debt, but she said she would confirm the composition of the other receivables.

Commissioner Killeen asked whether the reported receivable values from local units—approximately $1.8 million as of Sept. 30, 2023 and 2024—reflected collection difficulties. County staff said collections on debt have not been a problem but that some communities are behind on regular operations and maintenance (O&M) invoices.

OAG staff reiterated that the MD&A is valuable to readers of the financial statements because it provides background and a summarized explanation of changes from the prior year. County management agreed to work with auditors to include the MD&A in next year—s filings.

The committee approved a motion to receive and file the OAG limited review report for the Sewage Disposal Systems. The motion was moved by Commissioner Wilson, supported by Commissioner Killeen, and recorded as carried. The committee asked staff to follow up with written clarification on the composition of the increased receivables and to ensure inclusion of MD&A in future statements.