By Sean Miner
Fielding a presentation from Michelle Hoffman of Clifton Larson Allen, the Orono City Council learned at its June 27 meeting that the firm issued its highest rating for the city’s finances in 2015.
“We did issue an unmodified, or what we call ‘clean’ opinion of the financial statements,” said Hoffman. “That doesn’t sound very glamorous, but it is the best opinion that we can issue.”
The audit, conducted annually per Minnesota statute, looks at financial transactions handled by the city to ensure accountability and best practices. Hoffman made clear that portions of the audit were conducted by necessity on estimates or samples.
Despite the unmodified opinion, the audit did return two areas where the city could potentially improve from a financial practice standpoint. Those areas were described most generally as preparation of financial statements and segregation of duties.
“Both of those are common in smaller cities,” said Hoffman. “It is a little bit of a cost-benefit analysis for the city to get rid of those.”
Particularly segregation of duties is difficult to shake for small cities. Having fewer paid staff makes delegating financial duties to separate parties to ensure accountability more difficult.
Hoffman did note one small infraction on the city’s part with respect to legal compliance with state standards. Of the 25-disbursement sample taken of bills the city paid out, three were paid past the 35-day state deadline.
Hoffman suggested that this was likely due to the payments’ handling between multiple departments in the city, which can cause delays.
“That’s also a very common one,” she said. “It’s definitely common, but not a big concern on our part.”
The report also included an overview of the city’s finances, across all its funds and assets. Hoffman noted small changes from the year before throughout, none of which were of concern.
Lastly, Hoffman pointed out that the city had earned the Certificate of Achievement for Excellence in Financial Reporting for 2014 from the Government Finance Officers Association. She said that it was likely the city would receive the award once more for 2015.
“It’s for going above and beyond, and taking that extra step,” said Hoffman. “It’s been many years now that the city has received that.”
The council asked a few questions about a federal change in pension reporting, then expressed pride in the audit’s result.
“Our city is financially sound,” said Mayor Lili McMillan. “I want to thank the staff and especially the finance department for that. I appreciate all the hard work that goes into producing good results every year.”
“Thank you,” she added.