Independent auditors issue clean opinion on Lauderhill's fiscal 2024 financials; officials flag internal control and fund‑balance items

Lauderhill’s external auditors reported a clean (unmodified) opinion on the city’s financial statements for the fiscal year ended Sept. 30, 2024, but staff and audit leaders told commissioners Monday there are areas to watch and internal control items to address.

Roderick (Rod) Harvey, partner at HCT, told the commission the audit opinion was unmodified and that no matters required modification of the opinion. "We are issuing an unmodified or clean audit opinion… there were no significant deficiencies noted with the internal control environment, and no matters of noncompliance were noted in accordance with uniform guidance," Harvey said.

City staff then summarized operating and fund results. Interim Deputy Finance Director Karen Pottinger reported that the general fund had an unassigned fund balance of about $5.0 million and a total fund balance of roughly $19.7 million, with a fund balance policy that targets 10–15 percent; the current general fund ratio stood near 5.83 percent of operating expenditures, below policy target. Enterprise funds were reported as meeting expectations for the fiscal cycle, but capital project timing affects year‑to‑date figures.

Commissioners and staff discussed a notable deficit the audit identified in the fire protection fund; Finance staff explained the fund had historical exclusions and that the negative equity dated to earlier policy decisions on billing and exemptions. The city’s financial advisers and rating agencies were reported to be aware of the trend, and staff said they were pursuing revenue/expenditure adjustments to address the deficit.

Harvey and staff also reviewed a three‑year trend analysis of liquidity and net position. Auditor Harvey noted implementation of accounting standard adjustments in 2023 — related to pensions and compensated absences — had caused notable entity‑wide shifts in unrestricted net position; staff explained those changes reflected accounting standard implementation rather than new cash losses.

Commissioners pressed staff about the city's grant administration after some commissioners said they had difficulty tracking COVID‑related grant disbursements. Finance staff said they were reconciling and submitting outstanding reimbursement draws; Pottinger told the commission she had recently filed prior-period reports in the federal grant system and the city is now working with the grantor on outstanding reimbursement. The city manager said grant administration had been moved between departments in recent years, and that staff had been working to centralize reporting and controls.

The auditor closed by outlining the "tripod" of responsibilities: elected leaders set policy and oversee governance, staff execute policy and manage daily operations, and auditors report findings and recommendations. Commissioners asked the auditor to remain available for follow‑up questions and for staff to provide additional detail on grant reimbursement status and department reporting responsibilities as a next step.