Huntington auditor gives city an unqualified opinion but flags budget line-item oversights

Huntington’s city auditor told the City Council on April 23 that the city’s 2023–24 financial statements received an unqualified audit opinion, while flagging budgeting oversights that produced modest overexpenditures in several funds.

"In our opinion, the financial statements referred to above present fairly," auditor Doug Rasmussen said as he opened the annual audit review, describing the opinion as unqualified and noting that the audit opinion is based on sampled transactions and procedures. He added that a clean opinion does not mean the city’s records are perfect in every respect, but that the sample supported the overall financial presentation.

Rasmussen walked council members through the report’s exhibits. He said the general fund showed a deficit of about $127,003, reducing the unassigned fund balance to roughly $538,000. The capital projects fund ran a roughly $29,000 deficit. Smaller funds saw modest increases: a perpetual care fund increase of about $10,001.70 and a municipal billing authority uptick of roughly $5,001.95, Rasmussen said.

Rasmussen also reviewed the city’s enterprise funds. The utility fund reported an increase in net position of roughly $271,000, which included about $229,000 in grant proceeds; removing grant proceeds from the calculation altered the net position change cited in the presentation. The secondary water system showed about a $55,000 increase, he said.

A separate audit letter and report sections (pages 60–65) identify a reportable instance of noncompliance and an internal-control matter tied to the budgeting process (referenced as finding 2024-1). Rasmussen said the overexpenditures stemmed from not including lease or rent expense in the general fund budget for payments owed to the Municipal Building Authority, which owns certain city assets and receives payments that the general fund must budget as lease expenses.

"That line item has to have an amount, a dollar amount for those payments," Rasmussen said, explaining that the payments are being made but the budget lacked the corresponding line items. He noted the city’s response included in the report: "Huntington City acknowledges the oversight and will refine budget procedures to prevent future issues." The auditor characterized the corrective response as appropriate and said the state auditor’s office typically monitors first-time findings and applies stronger scrutiny if the issue reoccurs.

Council members questioned whether the amounts had changed since the initial budget and sought clarification on specific line items. The auditor confirmed the overspending was technical — the expenditure occurred but the budget did not reflect the lease payment line — and said the fix is to include the amounts in current and future budgets to avoid repeat findings.

After the presentation and a short period for questions, the chair asked for a motion to adjourn. A member moved to adjourn; the motion was seconded and approved by voice vote. No formal roll-call vote was recorded in the transcript.

The audit report’s findings require the city to refine budget procedures and to include lease/rent obligations tied to the Municipal Building Authority in the general fund budget to prevent future reportable overexpenditures. The City Council accepted the auditor’s presentation; next steps are implementing the corrective budget practices described in the city’s response to the audit.