Pierz audit finds strong financial management

The City of Pierz held its regular monthly council meeting on Monday, June 10, where the results of the 2023 annual financial audit were presented. Certified Public Accountant Ashley Meagher of Schlenner, Wenner & Co. delivered a detailed report on the audit findings to the council and members of the public in attendance.

Meagher has conducted Pierz’s financial audits for several years, providing an outside perspective on the City’s financial management and compliance practices. She began her presentation by outlining the audit process, which involves extensive documentation requests, testing of financial records and transactions and evaluation of internal controls.

This year’s audit resulted in an unmodified or “clean” opinion on the City’s financial statements for the year ending Dec. 31, 2023. An unmodified opinion indicates the auditor found no material misstatements or issues arising from their work. Meagher commended City staff for their cooperation throughout the audit.

While small cities like Pierz often face challenges in properly segregating financial duties between a limited number of staff, Meagher reported the City has taken proactive steps to strengthen internal controls. City Administrator Laura Wacker, who is in her first year in the role, now shares access to financial systems and employee records with other staff. This improves oversight and reduces the risk of errors or misuse of funds.

The general fund, which supports most day-to-day city services, saw healthy growth in its unassigned fund balance. Meagher reported the cash balance rose to 96.9% of budgeted expenditures in 2023, a dramatic jump from its budgeted expenditures in 2022, which was sitting at 71%. This exceeds the City’s new policy goal of maintaining a 60% balance, demonstrating a strong cushion against unexpected costs. Both revenues and expenditures increased modestly compared to 2022 levels. Insurance proceeds from claims on City property boosted the miscellaneous revenue category.

Other governmental funds like the fire department and capital project funds saw modest fluctuations that Meagher characterized as normal given the nature of their activities from year to year. The electric utility enterprise fund continued strong performance with a small increase to its net position balance.

One enterprise fund that saw a significant decrease in revenue from 2022 to 2023 was the golf course fund, falling from around $400,000 in 2022 to around $100,000 in 2023. However, Meagher said the golf course fund was still overall looking healthy and the decrease in revenue was mostly a result of expenses related to the golf course expansion project.

“If you do look at that strictly that ‘23 column, you think, ‘Gosh, our golf courses, our operations are not going well,’” Meagher said. “A lot of that is the project. So just kind of keep that in mind as far as that goes.”

Meagher took time to recognize steps the City has taken to improve financial management practices in response to prior audit recommendations. Access controls were strengthened as discussed. The City also adopted a formal policy establishing target fund balance levels to guide budgeting and ensure long-term stability.

The only continued recommendation that the City of Pierz had not yet implemented in 2023 was that the City complete invoice reviews and payment approvals before vendor payments are made, instead of the City’s current method of reviewing payments after the checks have already gone out. Meagher said this would allow the City to catch any errors in payments before it has already been sent to the vendor.

“That’s what people do in their personal lives,” said Mayor John Perleberg. “We probably should do it for this, too.”

In closing, Meagher commended the City’s overall financial position and trends under the leadership of the Council and City staff.

Perleberg also thanked his fellow Council members and City staff for their hard work, saying it was because of everyone that debt per Pierz citizen had been going down and net worth had been going up.

“I just wanted to tell everybody here thanks, because we hold the line on a lot of things. I can see that the line is starting to go up again. That’s a positive for everybody in town,” Perleberg said.