Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Audit topic
No spam. Unsubscribe anytime.
East Ridge receives clean audit but auditors note two repeat internal-control findings
Summary
HHM CPAs presented the FY2025 audit to the City Council, issuing an unmodified opinion on the financial statements and federal awards while reporting two repeat internal-control findings; auditors said management has a corrective-action plan and the general fund balance equals roughly five months of operating expenditures.
Brock Oliver of HHM CPAs told the City Council on March 12 that the firm issued an unmodified ("clean") opinion on the City of East Ridge's FY2025 financial statements and on the single-audit of federal awards, including ARPA funds. He said auditors spent roughly 400 hours on the engagement and that no fraud or disagreements with management were identified.
Oliver said auditors found two repeat reporting/internal-control issues (2025‑01 and 2025‑02) related to reconciliations and interfacing processes that were not fully corrected at audit time; he said management has put corrective-action plans in place and auditors expect these to be resolved for FY2026. On federal awards testing (ALN 211027, ARPA), Oliver reported no findings for the current or prior year.
Oliver also provided a benchmark analysis of the general fund, noting the city's unassigned fund balance as of June 30, 2025, was about 13.7 (percent or $13.7 million was explained in the presentation) relative to total expenditures of roughly $27.6 million, producing an unassigned-to-expenditure ratio of about 39 percent—about five months of operating reserves. Oliver said that falls within the commonly recommended four‑to‑six‑month benchmark.
Council members asked for clarification about whether the reported total expenditures included pass‑through items; staff confirmed some transfers (border region) inflate the citywide figure and that the city's operating expenditures (exclusive of pass‑throughs) would yield a slightly larger reserve ratio. Council members also questioned whether reconciling items had been fully cleared; Oliver said the items were repeat findings from 2024 but had corrective actions in progress.
The presentation concluded with an offer from auditors to answer follow‑up questions and to supply the written audit report and required communications under SAS 114 for the council and governance records. The council did not take further action at the meeting beyond public discussion and acceptance of the presentation.
