Accountant warns of audit risk, Kaliseum deficits as board approves contingency moves

County accountant Corinna Hervey told the Kalkaska County Board of Commissioners that recent accounting variances, coding errors and pending Treasury lawsuits left the county vulnerable ahead of the June 30, 2025 audit. Hervey said some budget coding was incorrect when payments were posted and that the county faces “two Deficit Elimination Plans due to budget deficits,” one of which she described as more difficult to resolve. She said the Kaliseum has incurred substantial debt and that the facility is "simply spending more money than bringing in."

In response, the Board approved several immediate steps: a motion to increase use of H&S Companies over budgeted amounts as necessary for 2025; a motion authorizing Hervey to file an audit extension if needed; and a motion allowing Hervey to work with the Deputy County Administrator or an appropriate county representative to review and approve the audit report when presented (all motions carried by roll call). Hervey provided budget figures for continuing accounting support — $39,000 and $36,000 for related services — and recommended additional accounting time to complete transition work and audit preparation. The Board instructed Hervey to attend Finance Committee meetings and signaled consensus to consider a 60-day extension for the audit if required.

The accountant also flagged a Kaliseum long-term revenue shortfall and mixed cash-flow metrics: payroll was up while revenues declined, and unrestricted fund balances and incurred debt were stressed. Hervey said a business plan for the Kaliseum is necessary and urged caution about using General Fund dollars to cover operations. The Board approved short-term contingencies; longer-term choices were left to upcoming Finance Committee and special-meeting discussions.