Beachwood audit director reports 'clean' 2024 audit; committee hears updates on mayor's court, cybersecurity and auditor contract

Director Harvey Rose told the Beachwood City Council Audit Committee on Monday that the city’s 2024 financial audit received an unqualified — or “clean” — opinion, with no citations or findings and no management recommendation letter required.

Rose, introduced by the chair as Director Harvey Rose, said the auditor’s report showed no material exceptions and that his office performs routine follow‑up to ensure departments implement any suggested improvements. “We had a clean audit report,” he said, summarizing the auditor’s conclusion.

Why it matters: a clean, unqualified opinion indicates auditors found the city’s financial statements fairly presented and its reporting controls functioning at the time of examination. The committee discussed operational areas that support that result, including revenue collection practices, reconciliations and internal review procedures.

Key details

Rose highlighted several specific items the audit team reviews: emergency medical services revenue (reported at about $1,400,000), non‑payroll cash disbursements pre‑audit procedures, bank reconciliations performed promptly, monthly reconciliation of investment records, and pension contribution checks to ensure amounts are sent to the state on time. He said the city charges a 3% lodging tax (lodging receipts were reported at roughly $800,000) and a 3% admissions tax on certain local facilities.

On internal controls, Rose described a routine pre‑audit review of invoices, contract tie‑outs and a cross‑check system between himself and the finance director to catch errors before they reach the council. He also described a perpetual fixed‑asset listing and said the city applies a $500 per‑item materiality threshold for many inventory and recordkeeping purposes, while listing high‑value small items (for example, computers) individually.

Mayor's court and reconciliations

Committee members asked about the winding down of the mayor’s court. Rose said he continues to perform monthly reconciliations of court receipts (including parking and bonds) and expects to present final balances as collections taper off. “I reconcile the mayor’s court cash through monthly reports and match it to the financials,” he said, adding some transactions still arrive and he will report the final balance when the process is complete.

Cybersecurity and confidential policies

Rose told the committee that cybersecurity has emerged as a statewide audit focus and that certain internal cybersecurity policies may be treated as non‑public by the Auditor of State to avoid exposing vulnerabilities. Counsel and committee members discussed drafting a policy that provides oversight guidance while recognizing confidentiality rules; committee members asked staff to return with recommended language.

Auditor contract and staffing

Members asked about the contract with the current auditing firm (referred to in discussion as Harris). Counsel said the contract runs five years and the city is in year three, leaving approximately two years before re‑procurement is required. Committee members noted the Auditor of State has staffing challenges and may assist with outreach or staffing guidance.

Staffing and audit team size

Rose said the formal audit team comprises one full‑time auditor, with additional support from finance staff and contractors as needed. He named staff who assist with payroll, pensions and procurement functions and emphasized a collaborative approach to control testing.

Next steps

The committee reviewed aspects of the 2025 audit plan and requested continued updates on cybersecurity implementation and any policy language that counsel recommends. With no further business, the chair moved to adjourn; clerk confirmed the meeting was adjourned.

Attribution: Quotations and details in this report come from Director Harvey Rose and statements on the public record from the Beachwood City Council Audit Committee meeting on Sept. 15, 2024.