Thursday, September 1, 2022

Sumpter receives top marks on financial audit

Sumpter Township is in excellent financial condition, according to Rana Emmons, a Certified Public Accountant with Post Smythe Lutz and Zeal, the independent auditing firm of the township.

Emmons told the board members during the Aug. 23 meeting that she would rate the township 10, 10 and 9.5 on a 10-point scale in three areas: financial health, reporting and efficiency. Emmons, a specialist in municipal accounting, praised the work of Financial Director Scott Holtz, Township Manager Tony Burdick and Treasurer Vincent Warren, and their respective staff members. Emmons' highly favorable rating came in response to a question from Deputy Supervisor/Trustee Tim Rush who said he wanted to be sure that residents could understand the audit report.

The township received an “unmodified” audit, meaning the auditors had nothing negative to report and no criticisms or questions regarding revenue and expenditures for the fiscal year ending March 31.  The “unmodified” classification means the audit is unchallenged and is an accurate report of revenue and expenses in the township.

Emmons reported a “nice bump” of 3.5 percent in property tax revenue, up from 2 percent last year and a 10 percent increase in state shared revenue, bringing an additional $150,000 to the general fund.

The township also saw $210,000 in investment income and a 70 percent increase in building permit revenue. Overall, Emmons said, the township added $653,000 to the general fund during the past year, after all collected revenue and expenses. 

Emmons also said Sumpter was “well ahead of many other communities” with funding of the township pension plan. The current pension liability is $12.8 million, and the township has deposited $11 million into the plan. The resulting $1.2 million balance means the pension liability is 90 percent funded, she said. Emmons added that the pension obligation was decreased significantly due to trustees' decision to deposit increased investment income in the plan.

Trustee Matt Oddy said he wanted to ensure that residents in the township were receiving good information about the financial health of the township. He asked Emmons to respond to erroneous claims that the township was misusing or mismanaging funds.

“You've looked at that and you can attest it is not happening?” he asked. 

“Absolutely,” Emmons responded. She then explained that the rules for an audit of this type were very specific “and you've got to know what you are looking at” when examining municipal financial documents. “This is much different than the corporate world. There is checklist on checklist we have to fill out,” she said.  

Township attorney Rob Young noted that the financial records were closely examined during an audit of this type. “This is an in-depth process with strict rules. When you sign this document, you are convinced it is a correct audit?” he asked Emmons. “Yes,” Emmons responded. 

Emmons said the cooperation and performance of the township staff was crucial in her ability to examine the financial records. “Municipal auditing is so specialized,” she said, “I come out here and not only do I physically look at the documents, I walk around and talk to the staff.”

She added that the stringent state reporting rules and procedures change regularly, and it is part of her job to understand the changes and exactly how municipal finances must be examined and reported. 

“I get no pushback from the staff here on the changes,” she said. “They all want to do it the right way. That speaks to the integrity of the administration.”