County auditor issues clean opinion on FY2025 financial statements; board places report on file

Joe, the audit firm's representative, told the Montcalm County Board of Commissioners that the audit team issued an unmodified, or "clean," opinion on the countys financial statements for the year ended Sept. 30, 2025. "The financial statements present fairly in all material respects the financial condition of the county," he said, calling the result the highest level of assurance the auditors can provide.

Joe said the audit included an emphasis-of-matter paragraph noting the countys implementation of Governmental Accounting Standards Board Statement No. 101 on compensated absences. He said the standard increased recognized liabilities related to paid time off but "did not have a significant impact on your financial statements." He also summarized key numerical highlights: a theoretical total net position of about $54 million (including nonspendable assets), revenues exceeded expenses by $1,485,000 for the 12 months ended Sept. 30, 2025, and an unassigned general fund balance of $12,698,280 (about 61.3% of annual general fund expenditures).

At the fund level, Joe reported a $3.2 million planned decrease in the general fund balance tied to board-approved appropriations (including about $2 million to road projects), a roughly $710,000 net decrease across governmental funds for the year, and notable activity in enterprise funds: the ambulance fund showed cash consumption while the delinquent tax revolving fund increased about $1.48 million. He also described long-term obligations: general obligation bonds were paid down in FY2025 but the drain commission retains roughly $2.9 million of debt.

On pensions and retiree health care, Joe said the countys pension plan shows approximately a $9 million net pension liability with plan fiduciary net position of about $27.2 million (roughly 75% funded), and that the countys OPEB (retiree health care) liability was about $1.18 million with about 48.1% of that liability funded. He added that, "as long as the county continues to make your annual required contribution set forth by MERS," full pension funding could be reached in roughly 15 years.

Joe also described the federal single audit process required because the county expended more than $1 million in federal funds; child support services was selected as the major program and received an unmodified opinion on compliance, with no reported significant deficiencies or material weaknesses.

During questions from commissioners, Joe explained a Treasury-triggered corrective action-letter process that can occur when a general fund shows consecutive years of decreasing fund balance; he described it as an automatic notice and said corrective action plans are usually accepted by Treasury. After discussion, a commissioner moved to accept and place the annual financial report for the year ended Sept. 30, 2025 on file; the motion was supported and carried by voice vote.

The board took no additional formal fiscal actions tied to the audit at the meeting. The county auditor indicated staff would be available to help draft corrective action language if the county wanted technical assistance.