Auditors presented the audited financial statements for the retiree health and welfare trust on Dec. 12 and issued an unmodified (clean) opinion for the retiree fund while drawing the board’s attention to internal‑control issues.

Kurt Schlicker, the engagement partner, said auditors found two internal control matters. He told the board that management elected to have auditors assist in preparing the financial statements and that auditors flagged it as a governance item. More materially, a sample of 60 retiree fund contribution transactions showed 20 exceptions (missing support or wrong rates). "If I add all of that up, we've got 20 out of 60 of those contributions couldn't be supported or were an error," Schlicker said. The audit team worked with participants and central payroll and reported an aggregate adjustment that the retiree fund was owed — $391,000 — for fiscal year 2024 activity.

The auditors emphasized that the retiree fund has only one material revenue stream (the retired employee group insurance assessment) and that accurate supporting documentation and improved procedures are required. Schlicker recommended "significant procedural changes to verifying, documenting, keeping the records for contributions" and noted turnover among employer staff as a contributing factor.

Board action: Jim Barnes moved to accept the audited financial statements and employer allocation reports; Jim Hartley seconded the motion. The board voted to accept the financial statements. The board asked staff to work with the controller's office, Siegel (the actuary), and employer participants to tighten remittance controls and ensure timely trial balances and actuarial inputs for future audits.

Next steps: Staff will prepare an action plan to improve documentation of contribution remittances, coordinate with employer participants to rebuild missing records where feasible, and report back to the board on remediation progress.