Oxford Village’s financial statements for the 2015-16 fiscal year scored high marks from the auditor at last week’s council meeting.

The village received an “unmodified opinion” from the East Lansing-based firm of Abraham & Gaffney, P.C.

“That is a clean opinion,” explained Aaron M. Stevens, a partner in the firm. “That’s as good as it gets. That’s what you want to see as a council.”

The village’s general fund ended the fiscal year June 30 with an unassigned or unrestricted fund balance of $490,237. This money can be spent or saved at the municipality’s discretion.

“That fund balance represents 22.6 percent of your annual expenditures,” Stevens told council. “The Government Finance Officers Association (GFOA) recommends maintaining a minimum fund balance equal to two months worth of normal operations. Two divided by twelve is about 17 percent and you’re at almost 23. So, your general fund is in excellent financial condition.”

During the 2015-16 fiscal year, the total revenues for the general fund amounted to $1.84 million.

“That was a decrease of about 2 percent (from last year),” Stevens said.

Forty-seven percent of village revenue is derived from local taxation, according to the audit presentation.

“Property taxes (are), by far, your largest source of revenue,” Stevens said.

Total expenditures for the 2015-16 fiscal year amounted to $1.92 million.

“That was an increase of about 5 percent over the previous year,” Stevens said.

The largest expenditure is public safety, which made up 46 percent of the budget, according to the audit presentation.

The village was able to increase its fund balance by $11,428, according to the audit report.

Stevens noted the village has been adding money to its fund balance every year since 2012, when it was at 13 percent.

“You’re on an upward trend,” he said.

Councilman Erik Dolan asked Stevens what he considers to be the “optimal” fund balance amount for the village.

“Everybody’s got a different answer for that,” Stevens replied. “As auditors, we used to say, way back when, 8 to 12 percent.”

But “then, interest rates tanked and state-shared revenue was in question and the property values declined,” so auditors started saying “maybe it should be 10 to 15 percent.”

“That’s why I always use the GFOA’s recommendation. Here is an industry-wide recommendation that they put forth,” Stevens continued.

He noted maintaining a fund balance equal to two months worth of operational expenses is a “minimum.”

That being said, Stevens told council, “I think 25 percent is probably a good rule of thumb as far as optimal goes.”

But he stressed it really depends on the village’s “comfort level.”

“I’ve heard 25 to 50 percent from my clients as to what they would be comfortable with,” Stevens said.

Stevens warned council, “You don’t want to have an excessive fund balance” because sitting on a lot of unassigned money can spark questions and concerns from taxpayers.

“You don’t want to be in that position,” he said.

However, Stevens told council, “I don’t think 22-23 percent is excessive by any means. Again, everybody’s got their own opinion on that.”