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Audit ending FY June 30, 2015 reveals City of Sturgis faces cash flow problems

Audit ending FY June 30, 2015 reveals City of Sturgis faces cash flow problems

Bill Stephens

December 9th, 2015

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Sturgis City Council members last night were presented the Audit for Fiscal Year ending June 30, 2015 which showed some significant events affecting the city’s financials.

Terry Carver, of Kemper CPA Group in Henderson, presented the audit during a 40 minute overview with council members. He said the independent audit was a repeat of previous years from an internal control standpoint that showed a significant deficiency related to overall segregation of duties, but the city has compensating controls and oversight in place and there were no findings of non-compliance.

Carver stated there were three significant events that affected the financials, one of which was the completion of the floodwall improvements that impacted the city’s records.

In addition, Carver said the water interconnect overall cost of improvements added debt to the city’s books, which are depreciating asset, but the overall cost relates to improvements were made for the Union County Water District and they will assume maintenance of those costs going forward.

And then lastly, Carver noted the new pension liability reporting standards. He said beginning with this year’s report all cities and municipalities that participate in a multi-state retirement system are required to report their share of any unfunded liabilities. He added that the county employer retirement system the city participates in is audited at the state level.

Overall, he stated it was a clean report, but there are some cash flow problems.

In other business, council members unanimously approved Mayor Mike Hardesty’s appointment of councilmen Pete Brown, Doug Rodgers and Jeremy Baker to the Finance Committee; and, council discussed and decided to see if any city employers were interested in an Air Evac membership.

The next regularly scheduled Sturgis City Council meeting will be held Monday, January 4, 2016 at 6:00.

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