City’s financial books are tops, auditing firm says
December 18, 2013
The finances and accounting of Sterling Heights remain sterling, according to city officials and auditors, who delivered the review at a Dec. 3 Sterling Heights City Council meeting.
Accounting firm Plante Moran released its audit of the prior fiscal year, which ended June 30. According to the firm, the report issued an “unmodified” opinion of the city’s finances — a top rating.
In addition, the Government Finance Officers Association endorsed the city’s financial reporting. According to city officials, Sterling Heights has maintained a bond rating of AA-plus.
Sterling Heights Finance and Budget Director Brian Baker said Plante Moran’s conclusions showed no surprises.
“We’ve managed our finances well, in light of declining revenues,” he said.
In a presentation, Baker noted the city’s employee savings, reductions in city spending and relatively low debt.
He explained that the city’s challenges include general fund revenues that have dipped by $8.2 million over five years, sending such revenues to their lowest levels since 2005. He said the successful November public safety millage vote will help the city recover somewhat, but the end result is still below 2009 levels.
Baker also said general fund spending decreased by $5.6 million in five years, and he attributes a large portion of those cuts to labor spending.
During the meeting, Mark Hurst of Plante Moran said his firm’s comprehensive annual financial report goes beyond the state’s financial reporting requirements, and he added that such a report could even help a community’s bond rating.
According to Hurst, all local communities are required to hire an independent auditor to look at their books and records, and issue a report. He said Plante Moran spent about 700 hours poring over Sterling Heights’ records.
“An unmodified opinion is the highest level of assurance that any CPA can give on a financial document, period,” Hurst said.
Hurst said the city’s audit was so clean that Plante Moran didn’t have a single required journal entry concerning the city’s books and records. Moreover, he said they couldn’t find any significant deficiencies or material weaknesses.
Hurst said auditors have compared such a feat to a perfect game or no-hitter in baseball.
“The threshold for having one of those (negative) items is paper thin,” he added.
Hurst added that the city has been fully funding its pension obligations, and he added that it is notable how the city has “significant room” under its debt margin.
Learn more about Sterling Heights at www.sterling-heights.net or by calling (586) 498-1058.
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