Chickasha accepts FY2022 audit; approves HSPG to perform FY23–24 audits

The City of Chickasha accepted the audited financial statements for the fiscal year ended June 30, 2022, and authorized an engagement with HSPG and Associates LLC to perform audits for fiscal years 2023 and 2024 after an auditor’s presentation that flagged control and compliance weaknesses but delivered an unmodified opinion.

Auditor Andy Cromer, a CPA with HSPG, told the council the audit opinion for the 2022 financial statements was “unmodified,” meaning the firm found the statements to be materially correct. Cromer said the firm was engaged in June 2023 but did not begin fieldwork until April 2024, and that the audit ultimately took about 10 months to complete instead of the three to four months he would expect under normal circumstances. “I would expect this to go much faster,” Cromer said.

Cromer reviewed the report’s compliance and internal-control sections, which the state requires be included in municipal audit submissions. He summarized recurring deficiencies: errors and irregularities in accounts payable testing (including overpayments, duplicate payments and payments to incorrect vendors), checks dated incorrectly after issuance, inconsistent utility billing-to-production ratios that made variance investigation impossible, insufficient follow-up on older emergency medical services (EMS) receivables, and a large number of bank accounts with collateral that did not meet the state statute’s allowable forms.

The auditor said some findings were repeats of prior years (including a utility-billing comment traced to 2021) and that certain items from 2022 had already been addressed in work toward the 2023 audit. Cromer also explained that some comments are reported directly to the state auditor’s office while others are provided to city management as less-severe recommendations.

City representatives said they expect to address many of the items identified but acknowledged some tasks will take time—closing or consolidating more than 50 bank accounts and updating collateral to the types specified by state law are not immediate fixes. City staff noted that a separate CPA firm, Crawford and Associates, assisted the city in preparing for audit work.

Council action: the council voted to accept and ratify the financial audit for the year ending June 30, 2022, and separately voted to accept and ratify the engagement letter with HSPG and Associates LLC to perform the City of Chickasha’s audit services for fiscal years 2023 and 2024 and authorized the mayor to execute the engagement.

Why it matters: An unmodified opinion supports the city’s financial credibility with the state auditor and potential bondholders, but Cromer’s list of control and compliance weaknesses—if not corrected—could increase the city’s administrative costs and financial risk going forward. Several items he identified (bank collateral, billing and receivable processes) relate directly to cash security and revenue collection.

What’s next: City staff said they plan to address many of the recommendations before the next audit cycle and to work with HSPG and their consultants to shorten the audit timeline for subsequent years.