FLINT, Michigan — Auditors submitted the City of Flint’s finalized financial audit today, delivering the required report to the state Department of Treasury on time.

“In spite of the many obstacles and time restraints, I want to thank the Finance team for all of their hard work and dedication and congratulate them for completing the audit on time,” Mayor Sheldon Neeley said. “We will continue to move this city forward.”

The audit gives an assessment of the previous fiscal year, which ended on June 30, 2019. The audit shows 12 material findings, which are areas of significant concern, typically because basic accounting practices were not followed.

Details of the incorrect financial data previously reported to both the State of Michigan and residents are included in the material findings and corrections. The report specifically cites a list of bad numbers included in last year’s audit. (Pages 179-193)

Those numbers have been corrected in this audit.

Work also is under way to correct improper processes and procedures outlined in the material findings, such as unauthorized and improper use of Purchase Cards, lack of documentation to show employees are being paid no more and no less than approved, and improper oversight for some purchases.

Some of the problems are complex, but the team at City Hall is working to correct as much as possible as quickly as possible. The current fiscal year is already half over, but the team is working to make significant improvements before the next audit.

The city was weeks behind schedule in completing the requirements of the audit when the new administration took office last month. Mayor Neeley made completing the audit by the Dec. 31, 2019, deadline one of his top priorities.

Among the steps Mayor Neeley took to assist in the successful completion of the audit:

  • Negotiated a $100,000 extension of state funding to pay for assistance for the city Finance Department from Plante Moran

  • Brought in the oversight of Dr. Eric Scorsone, a municipal finance expert who is on loan to the city from Michigan State University

  • Named long-time city Treasurer Amanda Trujillo to serve as acting finance director

Mayor Neeley issued a personal thank you to the team in the Finance Department for working so hard to get the audit process back on track.

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Overall, the audit reports total general fund revenues of $53.2 million and expenditures of $52.5 million for a total positive balance of just over $720,000 and resulting in an end-of-year general fund balance of $24.4 million. (Page 32)

However, the city continues to faces challenges in its overall net position. Liabilities far exceed assets, fueled in large part by long-term debt associated with pension and retiree health care costs, which total $443.6 million. (Page 20)

The full audit is being publicly released today as part of the administration’s commitment to transparency, despite an attempt by Council President Monica Galloway and Finance Chairman Eric Mays to limit its release.

The Flint City Council hired auditors Rehmann Robson to conduct the FY 2019 audit. Rehmann Robson confirmed for the administration this morning that the audit had been turned in, but when asked for a copy said in a message that the firm had only released it to Galloway and Mays at their request.

Other members of City Council did not support the action and released the report upon learning about the Council leadership’s unilateral attempt to withhold time-sensitive information.

“No one or two members of the City Council are authorized to speak on behalf of the full City Council body,” City Councilwoman Eva Worthing said. “It is unfortunate that Council leadership would attempt to arbitrarily withhold such an important public document.”

The financial audit report can be found here: https://www.cityofflint.com/2019/12/31/city-of-flint-completes-financial-audit-on-time/

Note: Page numbers indicate the page number on the audit report (not the PDF file’s page number).