Escanaba auditors issue clean opinion; report shows $15.8M in federal funds and $20M in capital additions
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Summary
Auditors from Clark, Schaefer & Hackett told the Escanaba City Council they issued an unmodified (clean) financial opinion for the year ending June 30, 2025, found no material findings on federal grants and highlighted roughly $15.8 million in federal funding and about $20 million in capital asset additions tied to sewer and water projects.
The Escanaba City Council on Feb. 5 received an audit presentation in which auditors Amer Alastari and Cody Mitchell of Clark, Schaefer & Hackett reported an unmodified opinion on the city's financial statements for the year ending June 30, 2025, and no material findings under government auditing standards.
The auditors also reported a uniform guidance review of federal awards found no compliance issues. "This year's audit we had three audit reports... First one was on the financial statement and that was unmodified report, meaning it's a clean opinion," Amer Alastari said. He told council the city received about $15,800,000 in federal funding during the year, most of it linked to COVID-related programs, and that those funds were spent in keeping with grant requirements.
Cody Mitchell walked the council through the financial detail, noting several large year-over-year variances. Cash and investments rose by roughly $5.8 million, largely because of an unspent $4,000,000 state infrastructure loan recorded at year end. Capital assets increased by about $20,000,000, driven primarily by large sewer and water projects and ARPA-funded work. "So the majority of this has related to those large sewer and water projects," Mitchell said.
Mitchell said accounts payable increased by about $2,400,000 because services were received before year end and paid afterward, and long-term obligations grew about $3,500,000 largely because of the state infrastructure loans. He also reported the city's net pension liability decreased approximately $2,600,000, attributing the improvement to strong investment returns.
The auditors flagged fund-balance metrics but characterized them as healthy: the general fund reserve could cover roughly 66% of one year's revenue based on balances at fiscal year end, a level well above the Government Finance Officers Association guidance for minimum reserves. On pension funding, the city plan was reported at about 75.85% funded and the public safety plan at about 90.98%.
Council asked no follow-up questions. The auditors said the audit was completed, signed and filed with the state two weeks early and encouraged staff to contact the firm if questions arise.
What happens next: The presentation was for information; no formal council action was required. City staff and council may use the findings when planning capital project spending and debt service.
