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Audit committee hears progress on FY24 findings, interfund balances and GASB 101 timetable
Summary
Jackson City audit staff told the committee they expect several FY24 audit findings to be resolved before the FY25 audit; interfund (due-to/due-from) balances remain out of balance and implementation of GASB Statement 101 will require additional HR/payroll data and cross-system work.
Jackson City’s audit committee on Monday received updates on steps to close FY24 audit findings, the status of interfund balances and a projected 45–60 day timeline for upcoming audit work.
The committee’s finance staff member, Nathan Reed, said vendor responses and a plan of correction are under review and that several FY24 findings are expected to be resolved in time for the FY25 audit. "I think everything here is gonna be substantially or actually complete," Reed said, adding that external auditors will begin field work shortly.
Why it matters: the committee must reconcile interfund (due-to/due-from) balances to avoid material misstatements in city financial statements. Reed described how the city previously simulated pooled cash through due-to/due-from entries that did not consistently match across funds, producing material weaknesses in FY24. "The receivable and the liabilities for each of those funds do not necessarily match," he said, noting staff will either propose journal entries or let auditors address the discrepancies during the audit.
Reed said implementation of GASB Statement 101—requiring wider reporting of postemployment obligations, including sick-time liabilities—will be a significant near-term workload. "We're going back, we're trying to go back five years," he said, describing efforts to gather legacy-system data and historical payout rates from HR and payroll. He estimated the immediate audit work would take "45 to 60 days."
Committee members pressed for clarity about completion criteria. When asked what "substantially complete" means in practice, Reed said final completion will occur when auditors post adjusting entries at the end of the audit process.
The committee also discussed pending retirements, with staff providing only an estimated range (roughly "10 to 20" mandatory retirements); no firm headcount was provided during the meeting. Reed confirmed FY24 is closed and that the city has delivered a trial balance and supporting documents to external auditors, allowing FY25 procedures to proceed.
What’s next: staff will continue reconciling interfund balances and gathering HR/payroll history to implement GASB 101; external auditors will perform field work and post final adjustments, after which Reed said the financial statements will be finalized.
