It took longer than usual due to turnover in the office and there are some issues that still need to be resolved, but in the end, Oxford Village’s audit was completed on time and the municipality’s financial statements for the 2016-17 fiscal year scored high marks.

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

In layman’s terms, that’s “a clean opinion,” according to Aaron Stevens, a principal in the firm who delivered a presentation regarding the audit at council’s Jan. 9 meeting.

“It doesn’t get any better than that . . . That’s what you want to see as a council,” he said.

The village’s general fund ended the fiscal year June 30 with an unassigned fund balance of $590,822. This money can be spent or saved at the municipality’s discretion.

“That represents approximately 28 percent of your annual expenditures,” Stevens said.

To put that in perspective, Stevens told council the Government Finance Officers Association recommends maintaining a minimum fund balance “equal to two months of normal operations,” which works out to about 17 percent.

“Your general fund is healthy,” he said.

Oxford was able to add $95,082 to its fund balance, which has been steadily growing.

At the end of the 2015-16 fiscal year, it was at 23 percent.

Stevens noted the village has added money to its fund balance every year since 2013.

“You’ve got an upward trend,” he said.

During the 2016-17 fiscal year, the total revenues for the general fund amounted to $1.897 million, which was an increase of about 3 percent over the previous year, according to Stevens.

The total expenditures amounted to $1.88 million, a decrease of approximately 2 percent.

Looking at the sewer and water funds, which are considered proprietary funds, each has a significant amount of available cash.

The sewer fund has an unrestricted net position (or fund equity) of $413,304, which represents about 60 percent of its operating expenditures.

It was at 89 percent the previous year.

Stevens advised council to “consider increasing rates” if the sewer fund’s net position continues to experience a change “that’s negative.”

The water fund has an unrestricted net position of $607,057, which represents 119 percent of operating expenditures.

The reason that percentage is so large is because the village netted $294,704 from the sale of the property it owned at 98 S. Glaspie St., which is now going to be developed into 16 single-family homes.

Factoring out that sale, Stevens said the water fund’s net position would be at 61 percent of its operating expenditures, which is a 4 percent increase over the previous year.

Unlike the fund balance for the general fund, Stevens said there is no recommended minimum net position for water and sewer funds.

“We don’t have a benchmark for proprietary funds like we do for the general fund because really, it depends on the condition of your systems,” he explained. “So, if your sewer system needs a lot of repair or maintenance, you’re going to want to have a higher net position.”

The auditors identified eight issues that it recommended the village address.

One of those is “segregation of duties.”

“The village lacks a sufficient number of accounting personnel in order to ensure a complete segregation of duties within its accounting function,” wrote the auditors in a Dec. 22 letter to council. “Ideally, no single individual should be able to authorize a transaction, record the transaction in the accounting records, and maintain custody of the assets resulting from the transaction.”

Because of this, the auditors wrote, “The village is exposed to an increased risk that misstatements or misappropriations might occur and not be detected by management on a timely basis.”

“It’s a tough pill to swallow, but you need more help,” Stevens told council. “You need more bodies to separate those duties and functions.”

Another issue the village needs to address is its number of authorized check signers, which includes all five council members.

“The number of authorized signers seems excessive,” Stevens said. “In my opinion, having a large number of authorized signers actually weakens the internal control over that process.”

“There were, in fact, two signers on the (bank) signature card that no longer work for the village.” he noted.

Approval of time sheets was another issue. The auditors noted four instances where the village manager did not approve employee time sheets in accordance with village policy.

“We don’t know whether it was done or not,” Stevens said. “It wasn’t written down and we have a saying, if you don’t write it down, it didn’t happen.”

Completing the audit was no easy task.

“We did have some challenges,” Stevens said.

The biggest difficulty was the amount of turnover in the village office last year. Following longtime village Manager Joe Young’s last day on March 31, the municipality had two interim managers, plus the clerk/treasurer, Susan Nassar, retired on June 1 and her position remains vacant.

The auditors had to make multiple trips to the village because the necessary records weren’t ready, so, Stevens said, “We really couldn’t do what we were hired to do.”

“Definitely personnel changes had a lot to do with it,” he said.

“We don’t typically come out three or four times,” Stevens noted. “We like to come out when you’re ready and we’ll do your audit when you’re ready.”

Ultimately, the audit was completed and submitted to the Michigan Department of Treasury by the Dec. 31 deadline.

“We got the work done – it just took us four trips,” Stevens said.

“Thank you for being tolerant of the circumstances,” said Councilman Erik Dolan.

“I appreciate all the help that we did receive while we were here,” Stevens replied. “Don’t get me wrong, (the) staff (was) great to work with.”

Village President Sue Bossardet stressed how critical the work done by Lori Fisher, the independent contractor working for the municipality since Aug. 28, was to the process. She straightened out months’ worth of records.

“It was very time-consuming for her to get that done,” Bossardet said. “She’s done a tremendous job sorting it out with no help.”

“I agree completely,” Stevens said. “Without her, we wouldn’t have hit that target, we wouldn’t have met that deadline. No way.”

“She’s got everything on the straight and narrow now, which needed to be done because it was not being done correctly in the first place,” Bossardet added. “I think she deserves a huge ‘yahoo’ for getting that done.”