Woodward, Okla. —
The City of Woodward has received another favorable audit.
Woodward City Commissioners held a special meeting Thursday evening to receive and file the Fiscal Year 2011-2012 Audit.
The audit results were presented by Russ Meacham, a CPA with the city's new auditing firm RS Meacham CPAs and Advisors, out of Clinton.
Meacham told city commissioners that the audit encompassed 3 reports:
• a report on the financial statement as a whole;
• a report on the internal controls; and
• a report on the receipt and handling of federal funds.
For each of these reports, Meacham said the auditing firm has issued "a clean opinion."
FINANCIAL STATEMENT REPORT
In discussing the report on the city's overall financial statement, Meacham reviewed the city's statement of assets and liabilities with the commissioners.
He said that the city's total assets equal over $88 million, including over $7 million in cash and restricted cash, $4 million in investments, $1.6 million in land, and $69 million in other capital assets such as buildings, vehicles, and equipment.
But, he said, that is balanced against the city's liabilities, which total around $34 million and include accounts payable for services like utilities, bond notes payable, capital lease obligations and other debts.
That still leaves the city with $54 million in net assets, Meacham said. However the majority of those net assets, or around $40 million, are invested in capital assets, while another $4 million is restricted assets that must go toward certain areas such as tourism, the cemetery, debt service and other purposes. Then there is another almost $500,000 in "unspendable" assets, which Meacham said "are effectively your inventory of water meters, trash cans, shovels, and so on."
The remaining $8.9 million is the city's unrestricted net assets, which he said "is the most important number when you want to look at where the city stands and where you're going, because the unrestricted net assets represent the funds you have available."
Explaining it another way, Meacham said that as of June 30, which is the end of the audit period, the city essentially had $8.9 million with which it could continue to fund daily operations.
After compiling all those numbers, the CPA said his firm was able to issue "an unqualified opinion" on the financial statement of the city.
"An unqualified opinion is the best opinion you can have. You want to have an unqualified opinion because you don't want any qualifications. Think of an unqualified opinion as a clean opinion," Meacham said.
Specifically, he said the opinion of the financial statement means that "materially the numbers we audited are correct; we might be off a $1 here or $1 there, but in an overall material sense, the numbers are correct."
REPORT ON INTERNAL CONTROLS
Moving on to discuss the report on internal controls, Meacham explained that auditors evaluated "are there controls in place so that we can know the numbers that you are reporting are correct?"
Once again, he said he was able to issue a positive opinion that there were "no material deficiencies" in the city's internal control process.
"You have good controls in place that are sufficient to make for accurate financial reporting," Meacham said.
REPORT ON FEDERAL FUNDS
Meacham explained that the report on federal funds reviews how the city handled the federal grant and loan money that it received.
He said that the auditing process for federal funds is somewhat complex because each grant has to be evaluated "based on the criteria established by the granting agencies," with each department having different requirements.
"We look at your grant awards and expenditures and then look at the administration of those funds to see if they were handled according to the proper criteria," he said.
In the review of the city's FY2012 federal grant administration, Meacham said, "again we have a clean opinion."
RESPONSE FROM CITY LEADERS
Mayor Roscoe Hill said he was impressed with the positive audit, especially considering the sheer volume of financial data and money involved.
"A few years ago our assets were around $40 million and now they're at $88 million," Hill said. "And it just surprises me that with all that the audit finds nothing. It pleases me, but it also surprises me because that's an awful lot of assets."
Meacham agreed that "it is a lot of assets and a lot of transactions going on in the city day in and day out."
He said it just goes to speak to the city's financial staff and the job they do that when those transactions are reviewed, no problems are found.
"It's your people that make that happen," Meacham said of the clean audit opinions.
City Manager Alan Riffel also said that the good audit can be attributed back to "good staff."
Especially since the Meacham auditing firm "looked at everything in a closer fashion because it was their first year," he said. RS Meacham was hired by city commissioners earlier this year to replace CPA Derrel S. White, who had served as the city's auditor for the past several years.
"They (Meacham) had a higher number of staff here for a longer amount of time, pulling more documents in order to familiarize themselves with our operations. So the fact that that level of scrutiny came out with the same outcome, speaks to what our staff works hard to do every day. And that's to be mindful in our stewardship of public dollars," Riffel said.
The city manager also expressed satisfaction that this latest audit continues the city's trend of earning positive audit reports.
"We've received an unqualified opinion for many years now, so having a new firm issue a similar finding on an even higher level of activity than we've had in the past is certainly reassuring that what we're working hard to accomplish is being achieved," Riffel said.