Shores receives clean opinion on latest audit

By: K. Michelle Moran | Grosse Pointe Times | Published December 5, 2012

GROSSE POINTE SHORES — The country may be poised on the edge of a fiscal cliff, but the Shores is apparently doing just fine.

The city once again received an unqualified opinion — the best result possible — for its audit, which covered the 2011-12 fiscal year. During a Nov. 20 City Council meeting, CPA Aaron Stevens of the Shores’ independent auditing firm of Abraham & Gaffney P.C. delivered the findings to officials.

“It’s a clean opinion. … That’s what you want to see as a council,” he told them.

Although the auditors generally recommend more separation of various financial duties, they recognized that this isn’t possible in a small community like the Shores, where a correspondingly small administrative staff handles a multitude of responsibilities.

“It’s really tough to segregate duties when you don’t have people to segregate them to,” Stevens said.

Property taxes remain the single highest source of revenue in the Shores, accounting for about 82 percent in the most recent fiscal year. The Public Safety Department accounts for the greatest chunk of the budget — roughly 42 percent — followed by general government services, which require another 22 percent, and Public Works, at 18 percent.

Although Stevens said they “didn’t find any fraud” in the city while doing the audit, he said that’s not really the purpose of the report.

The fund balance has been steadily growing and recovering since 2009, when the Shores switched from a village to a city and had to use its fund balance to cover operating expenses as it shifted to a new fiscal year calendar.

The unassigned fund balance for the general fund as of June 30, 2012, was $603,878, according to the audit. That represents 11 percent of the general fund budget — up from a fund balance equal to approximately 9 percent of the general fund budget in 2011, Stevens said. It’s still less than the 20 percent the auditors recommend — which would cover 60 days of city operations — but is still considered an improvement, he said. The Shores would need just over $1 million to meet that goal, he said.

“To the city’s credit, the upward trend you see on the fund balance (has taken place) in difficult economic times,” Stevens said.

The Shores added $205,116 to its fund balance in the last fiscal year.

“You gave a good overview,” Mayor Ted Kedzierski told Stevens upon delivering the report.

City Council member Bruce Bisballe, who chairs the Finance Committee, said they looked at a draft of the audit and will be using the information for long-term planning for bonding and other financial issues.