Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Audit Acceptance topic
No spam. Unsubscribe anytime.
Plante Moran gives Mount Clemens a clean opinion; auditors flag segregation-of-duties and a year-end journal adjustment
Summary
Plante Moran reported an unmodified opinion on Mount Clemens’ fiscal-year 2021 financial statements, highlighted $1.5 million general-fund revenue growth (largely CARES Act and a sidewalk-fund transfer), noted pension funding at about 104%, and reported two audit findings: segregation-of-duties challenges and a corrected duplicate journal entry for water and sewer receivables.
Plante Moran presented the city’s fiscal-year 2021 audit to the Mount Clemens City Commission and issued an unmodified (clean) opinion on the financial statements. "An unmodified opinion means the financial statements are appropriately stated and materially correct," audit partner Lisa Planca told the commission.
Plante Moran identified two items in its required communications letter. First, the auditors repeated a long-standing segregation-of-duties concern that is common in small local governments with limited staff; auditors said they have observed progress but recommended continued attention. Second, auditors identified a material year-end adjustment—a duplicated journal entry related to water and sewer receivables—that was corrected in the financial statements before issuance of the opinion.
Auditors presented financial highlights, including roughly $1.5 million in year-over-year growth in general-fund revenue, primarily driven by additional state and federal CARES Act funding and a transfer from the sidewalk fund. The auditors noted the pension plan is well funded, reporting about 104% funding at year-end, while the city’s net OPEB liability remains less funded. Auditor remarks flagged upcoming GASB accounting changes (leases, subscription reporting) that will require management work to implement in future reporting periods.
Commissioners asked for clarification about the operational impact of upcoming GASB changes, cybersecurity and IT control weaknesses tied to segregation of duties, and the potential for an additional single-audit engagement if federal spending thresholds (for ARPA and other federal funds) are exceeded. Plante Moran explained a single audit would be an additional compliance-focused engagement if the city spends more than the federal threshold.
A motion to accept the financial report, management letter and auditor opinion as presented was made, seconded and approved by roll call.
What happens next: the city accepted the audit; management and the commission will continue efforts to address segregation-of-duties issues and prepare for GASB reporting changes and potential single-audit requirements.
