Auditor: Olean’s FY 2024–25 statements fairly presented; internal controls need fixing

Christopher Zera, the audit representative for RA Mercer & Co., PC, opened the committee session with the audit opinion for fiscal year 2024–25 and said the city's financial statements "are prepared and presented in accordance with federal and county standards, generally accepted in The United States." He cautioned that the audit identified an unusually large number of material journal entries and reconciliation issues that slowed the audit and require management attention.

Zera highlighted that interfund receivable and payable balances (notably waterfront and sewer receivables) did not match at year end, requiring adjustments and further review. He said the report documents the condition, the effect and the auditor's recommendations and that management's planned responses appear in the report. "At year end, we saw that they didn't match," he said, describing the additional work needed to reconcile fund balances.

The auditor also reported a net position increase of about $4.6 million from the prior year and noted that assets and deferred outflows exceeded liabilities and deferred inflows by roughly $68 million citywide. The general fund showed an ending fund balance of approximately $2.5 million (up from $1.8 million the prior year), with revenue exceeding expenditures by about $3.3 million.

Council members pressed for clarity on whether the findings suggested fraud or misuse. Zera responded that the findings primarily reflect internal-process deficiencies rather than fraud. A councilmember summarized his takeaway: "Overall, the city is doing okay at the macro level... But it is in the day to day that we continue to have some areas of deficiency that we need to correct."