Ocoee finances receive clean bill of health

At its June 3 meeting, the Ocoee City Commission heard a presentation by a representative from certified public accounting firm Purvis Gray on the results of an audit performed on the city’s financials for the fiscal year that ended Sept. 30.

Timothy Westgate, an audit partner at the accounting firm, commended the city’s management and leadership for the results of the audit that examined the city’s financial statements, internal control, investment fund management, general financial management and compliance with grant requirements, while also providing recommendations to implement or consider.

“Our responsibility is to provide an opinion on (the city’s) financial statements based on our audit (and we are) pleased to say we are issuing and have issued a clean opinion, an unmodified opinion,” Westgate said. “That is the highest level of assurance that you can have on audited financial statements. So, (we commend) your leadership and management in attaining that clean opinion as part of our audit.”

As part of the audit, the city’s internal control related to financial reporting also was examined to aid the auditors in crafting the ultimate unmodified opinion that was given on the financial statements. 

“We look at internal control related to financial reporting in the process of designing our audit for that ultimate opinion on the financial statements, but we do not provide an opinion on internal control,” Westgate said. “However, if, during the audit process, we encounter things we think would be material weaknesses or significant deficiencies or matters that you need to be made aware of, we would report those to you. Pleased to say that under the standards, nothing rose to that level of material weaknesses, significant deficiencies, anything like that. It is standard language reports in that regard, very boring reading, which is a good thing when you have an audit.”

The city also received a clean report on its compliance with Florida Statute 218.415 — which outlines the requirements for local governments to develop and implement written investment policies for surplus funds, prioritizing safety and liquidity over investment returns — and was commended for its work in the general management of the city’s finances in a required Florida Auditor General report that focuses on meeting requirements to avoid general deteriorating financial conditions, financial emergencies such as not being able to make payroll. 

The last group of required reports for the audit was related to the city’s federal single audit, a condition for receiving any government grant. 

“Of course, the city receives federal and state grants, and this year, it met the criteria for having a federal single audit,” Westgate said. “When you receive grant money, it’s not freely given. It always comes with additional strings, compliance requirements attached to it, and included in that is an audit requirement that, based on a risk assessment, identifies major programs, and through that, we identified the Coronavirus State and Local Fiscal Recovery Fund program as your major program, and we’re required to look at the compliance requirements that come along with that program. Pleased to say the city did comply. We also issued an unmodified opinion, that’s a clean opinion, related to that compliance.”

Along with the required reports, the audit also provided a few financial highlights it found in the city’s statements, specifically its ability to not only maintain sufficient fund balance positions, which met the recommendations of the Government Finance Officers Association, but it also saw an increase in all but one of its major funds. 

“A few financial highlights … about the governmental funds, primarily your major funds (such as) your general fund, road impact fee, your ARPA funds and your capital projects fund, all of them had increases in fund balance, except the capital project fund,” Westgate said. “However, that was as budgeted, so no surprises in that decrease in fund balance. All of them still did maintain sufficient fund balance positions that met the recommendations of the Government Finance Officers Association — (which is) what they see as the minimum fund balance requirements, as well as funding in there for future pandemics, hurricanes that may come down the line, or projects that the city wants to get into, based on our analysis.”

On the proprietary fund side, all of the city’s funds saw an increase in net position, meaning they had a positive net income. However, the city’s solid waste fund, which has been a topic of discussion for several years in these audits, had a deficit position of $843,000. 

“We (would) still like to continue that discussion, because while rates have increased, we recognize and encourage your continued effort in identifying the systemic process behind it,” Westgate said. “It takes time to recover from (a negative position) as well as to replenish the fund back to the positive position you’d like it to be in.”

The final fund the audit examined was the city’s employee retirement funds, which saw an increase of $22 million, primarily driven by investment performance. The audit found the overall general employees fund had roughly a 94% funding position, which is a very strong position, and the police and fire fund is just shy of 96% funded.

To close the audit results presentation, Westgate gave the city three recommendations to consider: The continued pursuit of recovering from a negative position in the solid waste fund, a budget monitoring process review regarding the amending of the budget throughout the year and a general encouragement to continue its efforts and investment into protecting the city’s technological assets and update some policies.