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Alpena County audit returns clean opinion; general fund edges up and pension liability remains sizable
Summary
External auditors told the county's Finance & Ways & Means Committee they issued an unmodified ("clean") opinion on the FY2025 financial statements, noting stable general-fund results and significant pension liabilities tied to the statewide retirement system.
Chelsea McConnell of Strailey Lapp and Kranz line told the Finance & Ways & Means Committee that the county’s fiscal year 2025 financial statements received an unmodified opinion.
"I am pleased to say you were issued an unmodified opinion. This is a clean opinion," McConnell said, explaining that the auditors judged the statements to be presented fairly in all material respects. She described the audit as conducted under generally accepted auditing standards and government auditing standards.
The presentation summarized balance-sheet and operating changes. Treasury figures cited in the meeting show reserve funds of $268,014, an unrestricted fund balance of $4,000,002.84, an ending fund balance reported at $1,429,852.00 and an unreserved fund balance of $1,161,838.00. McConnell said revenue declined year over year largely because a major grant-financed project—the airport runway—wrapped up in 2025 and related grant revenue decreased.
McConnell identified the areas the auditors treated as significant risk for the 2025 audit: management override of controls and revenue recognition. She said the audit proposed and the county accepted adjustments and that auditors did not identify material uncorrected misstatements or have disagreements with management. The team did report three material weaknesses, which McConnell characterized as common in governmental audits and related to preparation of financial statements and segregation of duties; one previously unrecorded bank account was corrected during the audit.
The auditors also reviewed pension-related estimates tied to the Municipal Employees' Retirement System (MERS). McConnell said a net pension-related position on the statement of net position was about $10.7 million at Dec. 31, 2025, noting the estimate’s sensitivity to assumptions such as discount rates and mortality.
The auditor highlighted that the county’s general fund ended 2025 with roughly 123 days of expenditures in unassigned fund balance, exceeding the Government Finance Officers Association’s minimum guidance of 60 days and reflecting a stable short-term reserve position.
No formal vote on the audit opinion was recorded during the meeting; McConnell took questions from commissioners about timing and process improvements. County finance and management were thanked for their cooperation in producing earlier issuance dates and in responding to auditor inquiries.
The committee moved on to other agenda items after the presentation; staff will incorporate the auditor’s required communications and internal-control letter into the county’s records.
