The City of Chadron got a clean bill of financial health on its audit for Fiscal Year 2021, which ended last September.
Michael Hobak of AMGL CPAs and Advisors of Grand Island told the city council Monday night that the city’s books were in accordance with generally accepted accounting principles and that all accounts finished in the black.
Hobak emphasized that the audit offers no opinion or guarantee that the information provided by the city was accurate – standard language in the accounting industry to avoid liability if an entity gave auditors phony numbers.
Hobak offered high praise to city staff for their cooperation during the audit and for their work on the books, explaining he needed to make only 2 journal entries instead of the 30-to-40 he normally needs today for an entity the size of Chadron.
As in every audit before, the city was for inadequate “segregation of duties to ensure internal control over cash receipts, disbursements, and recording of transactions” but Hobak said it’s because there aren’t enough staff to meet that standard.
He did find 2 potentially serious instances of non-compliance with a provision of law – bank balances at 2 financial institutions exceeded FDIC coverage and pledged securities by over $225,000 but wasn’t worried about either one.
He says one bank discovered the problem and increased the amount of pledged securities before it even showed up in the audit while the other was corrected as soon as the audit found it.
Hobak said the city made the appropriate official response, saying it will ask the institutions holding city funds to assign additional collateral to fully secure all the deposits.