The City of Neosho has once again received a clean audit report from auditors Davis, Lynn and Moots, following a similar report last year.
The unqualified opinion given by auditors means the city's financial condition, position and operations were fairly represented in its basic financial statements.
Council reviewed and accepted the 2011-2012 audit in their Tuesday evening council meeting.
Andy Marmouget, partner at Davis, Lynn and Moots, presented the findings and said the city had received a "very good" audit report.
Marmouget noted the city's net assets in governmental activities were at $22.7 million, a $1.7 million increase from last year. He said the majority of the assets are capital assets, including land, buildings, equipment, and historical cost of the city's roads.
Meanwhile, the city's unrestricted cash for governmental activities was just under $5.3 million, an increase of $1.6 million from last year.
The city's total liabilities for governmental activities was $14.5 million, down by $650,000 from last year.
Marmouget noted that the city's general fund revenues were also down for the year, at $4.6 million, a $711,000 decrease from the year prior, while the city's expenditures were $3.3 million.
"The reason for the decrease is the city received less grant monies in its general fund this past year, and that's primarily due to the airport project in the prior fiscal year," Marmouget said.
The city's tax revenue was also slightly down for the year, at $3.6 million, a decrease of $56,000.
Still, Marmouget said the total general fund balance, which started the fiscal year at $1.9 million and ended at $2.4 million, reflected a 72 percent, or eight and a half month reserve.
"That's a very good reserve," Marmouget said. "In fact, in 2010, the city had just $84,000 in its general fund so in two years it's brought it up, that's one of the lowest reserves we've seen in any city we audit to one of the higher reserves we've seen, in just two years, so, I commend the city for that."
Marmouget reported no instances of non-compliance in the audit, though the auditors did find one material weakness.
As has been in the city's audit in previous years, the audit report noted a lack of segregation of duties.
"The city did take additional steps to segregate some of those duties this past year and I commend the city for doing that, there's just a few more steps the city needs to take and that will get rid of this lack of segregation of duties comment from us," Marmouget said.
He also noted the city's water loss percentage for the year was 60 percent, while a normal city loss percentage is 15-20 percent. However, Marmouget said he suspects the city's water system improvement project could be to blame for the water loss.
"Thanks to every employee we have because they stood with us, the citizens of Neosho stood with us when we made some tough decisions," said Neosho Mayor Richard Davidson. "We've shown that those decisions were right and despite the criticisms we've received from a very vocal minority we've held firm to our direction and our decisions and the results are here in front of you."
Page 2 of 2 - "The entire staff here was very helpful," Marmouget added.