ADRIAN — The city of Adrian is exiting 2023 and entering 2024 with what was described as a healthy and solid general fund balance during a recently held financial audit presentation.

Adrian should have at least seven-eight months of revenue in its general fund balance at the end of fiscal year 2023, it was said during the Dec. 18 audit presentation conducted before the Adrian City Commission during its second premeeting work study session in December.

The independent and certified public accounting firm of Clark Schaefer Hackett prepared and presented Adrian’s audit for the fiscal year that ended June 30, 2023. The audit covered the 2022-23 financial calendar year.

Three audit reports for Adrian were issued, it was explained to the city commission by Brian Mosier, certified public accountant and shareholder with Clark Schaefer Hackett. The first audit resulted in an “unmodified opinion” on the city’s financial statements, which Mosier later clarified “is the report you should hope to get with every audit.”

The second audit looked at government auditing standards and was issued because Adrian has more than $750,000 in expenditures and federal awards. The findings from this audit showed no material weaknesses in internal control, no significant deficiencies in internal control and no material instances of noncompliance noted.

The final audit presented was on uniform guidance, Mosier said. This audit primarily applied to any federal awards Adrian received from 2022-23. The auditing firm’s findings related to this report resulted in another “unmodified opinion” on compliance, no material weaknesses in internal control, no significant deficiencies in internal control noted and no instances of noncompliance noted.

After covering other information with the commission, Mosier credited the city for having a “clean audit report,” referring to it as a very “boilerplate report.”

Clark Schaefer Hackett, Mosier said, when working with the city of Adrian, dealt with city staff from the finance department and primarily Adrian City Administrator Greg Elliott and Finance Director Nathan Owen. The accounting firm, when describing its communicating process and relationship with the city, said there were no disagreements with management; there were no difficulties in dealing with management; no material misstatements in the financial statements; and no transactions that lacked authoritative guidance.

“Everybody is very cooperative in giving us what we need,” Mosier said.

Some key findings that Mosier highlighted during his audit presentation showed a $1 million decrease in business investments due to the merger of Dial-A-Ride and Lenawee Transportation to create the Lenawee Public Transportation Authority; revenues for the city have increased over the last couple of years after being steady since 2020; general fund revenues also have been steadily increasing since 2019; and most of the city’s net investments are in its capital assets, just over $25 million.

Mosier’s entire presentation consisted of 18 prepared slides that delved into Adrian’s finances including liabilities and deferred inflows, governmental activities, business-type activities, general fund revenue and expenditures, general fund property tax revenue, operating income and major enterprise funds (water treatment and wastewater treatment). A year-by-year comparison of audited financial statements dated back to the fiscal year of 2019.

The COVID-19 pandemic dealt some impact to Adrian’s finances during 2020 and into 2021, Mosier, who has 12 years of experience auditing and consulting with not-for-profit organizations and governmental entities, said.

During the city commission’s regular meeting, which started just after 7 p.m. Dec. 18, one of its action items was to approve the fiscal year 2022-23 annual comprehensive financial report (ACFR) and the authorization of year-end encumbrances and carry-forwards.

Within the ACFR was Clark Schaefer Hackett’s full audit opinion, which states “In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the city of Adrian, Michigan, and its discretely presented component units, the Brownfield Redevelopment Authority and Downtown Development Authority, as of June 30, 2023, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General Fund and the Major Streets, and Local Streets, and American Rescue Plan, special revenue funds for the year then ended in accordance with accounting principles generally accepted in the United States of America.”

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Year-end encumbrances and carry-forwards for Adrian total $4,150,263, of which $461,932 belongs to the general fund, according to information prepared for the city commission by Owen.

In other business

The Adrian City Commission at its Dec. 18 meeting also:

• Approved a resolution to award a bid for the demolition of 590 S. Main St., as the city continues to move forward with the Kiwanis Trail pedestrian tunnel project. The former single-family house on the property has no utility connection and is in the path of the tunnel’s construction, the city said. The lowest of the sealed bids received for the demolition work went to Slusarski Excavating & Paving, Inc. of Adrian at $28,410.

• Approved the acquisition of kitchen cabinets and countertops for the Adrian Fire Department at a cost not to exceed $16,894.56, which was the lowest of three bids received and came from Carter Lumber of Adrian. The department’s current cabinets were donated by Merillat Cabinets when it still had a factory in Madison Township, Fire Chief Aric Massingill said. However, with the “extensive” use of up to eight firefighters a day, the cabinets “have come to a point where they need to be replaced after many repairs have been made.”

• Received and reviewed miscellaneous reports from city departments, the Adrian Fire Department, code enforcement/rental inspection reports, zoning board of appeals/planning commission meeting minutes and Downtown Development Authority (DDA)/Main Street meeting minutes.

— Contact reporter Brad Heineman at bheineman@lenconnect.com or follow him on X, formerly Twitter: twitter.com/LenaweeHeineman.

This article originally appeared on The Daily Telegram: City of Adrian receives positive remarks during audit presentation