City accepts unmodified FY2022 audit; council ratifies HSPG engagement for FY2023–24

The City of Chickasha on Monday accepted an unmodified (clean) auditor's opinion for the fiscal year ended June 30, 2022, and the City Council ratified a letter of engagement with HSPG and Associates LLC to perform the city's audit services for fiscal years 2023 and 2024.

The report presented to council staff was delivered by Andy Cromer, a certified public accountant with HSPG. Cromer said the audit opinion is unmodified and that the financial statements will be filed with the state auditor's office as required. "The audit opinion in here is a clean opinion or it's an unmodified," Cromer said.

The nut of the audit, Cromer told the council, is that while the numbers in the financial statements are materially correct, the firm identified process weaknesses in internal control and compliance that were included in the report sent to the state auditor's office. He said the audit engagement began late: HSPG was engaged in June 2023 but fieldwork did not start until April 2024, extending completion time to about ten months instead of the three to four months the firm considers typical.

Cromer reviewed several recurring operational findings that appear in the written report. In accounts payable testing the auditors identified overpayments, duplicate payments, payments to incorrect vendors and late disbursements. Cromer also noted improper check dating practices and a lack of independent review for certain disbursements. The report repeats a prior comment from 2021 concerning utility-billing reconciliation: production, metered delivery and billed amounts could not be reasonably reconciled over time. Cromer said a recent software implementation may have corrected some of those issues but could not confirm.

The auditors also flagged remediation work on ambulance (EMS) receivables. Cromer said billing is handled by a third-party contractor and that older receivables had not been worked sufficiently, contributing to a "significant drop in EMS revenue." He recommended the city ensure that the party performing billing follows established receivable-collection procedures.

A separate section of the auditor's report contained comments the firm deems less severe but intended for city management. Cromer said the city has more than 50 bank accounts, which complicates cash management, and recommended rationalizing accounts and ensuring bank collateral meets state-statutory requirements. "You had sufficient collateral numerically, but it was not the right kind under state law," Cromer said. He advised the city to begin addressing those items now, acknowledging that closing or consolidating many accounts may take time.

After the presentation, the council moved to accept and ratify the FY2022 financial audit and to ratify HSPG's engagement to perform the FY2023 and FY2024 audits and authorized the mayor to execute the engagement letter.

The council votes on both the audit acceptance and the HSPG engagement were recorded as approved. Cromer and council members said they expect the audit process to be faster in the future as staff turnover stabilizes and the city works through the recommendations.

The city will file the FY2022 financial statements and accompanying auditor's report with the state auditor's office, per statutory requirements; the audit report lists internal-control and compliance comments that the state may review further.