Houghton Council Calling Special Meeting Tonight to Discuss FY 2021 Audit

HOUGHTON – The city of Houghton is calling a special meeting tonight to talk about their 2022 audit, that occurred back in June. The fiscal year for 2021 ended june 30th back in summer, and the city’s new auditor noticed a small deficit within the city’s Public Improvement Fund. If there is a deficit within one of the city’s accounts they are required to report it. City Manager Eric Waara says that the deficit is easily explained, as that particular account is way for Houghton to move grant funding from account to account.

“How did it happen? Well our Public Improvement Fund is a fund that doesn’t have regular revenue stream on its own. There’s no charges and things. What we use the Public Improvement fund for is to separate large capitol projects out of other city funds. Especially where there’s grant funds involved. So internally, and and for the auditors, those funds can be accounted for separately from and not inter-mingled with other city funds.” – Eric Waara, Houghton City Manager

The city does not anticipate the meeting to last a long time, as the council needs to approve a letter to be set to the Department of Treasury, explaining how Houghton plans to fix the paper issue on their audit. A similar situation happened in Houghton about 10 years ago. This most present issue arose because of how the fiscal year ends in the middle of construction season.

“What happened in this is, in the ebb and flow of the public improvement fund, our rental rehab project, reimbursed through MEDC, an invoice for the project was submitted in August. Which was two months into our new fiscal year, but included work that happened in June. Which was in the old fiscal year. So in the crossing of payments and deposits, etc. on the reimbursement of that $15,174 portion, it wasn’t booked as a receivable, in the previous fiscal year. Which then at audit it shows, that there’s a deficit there.” – Eric Waara, Houghton City Manager

Once the council approves the letter for the treasury, Waara will then pass it along to Lansing. During the summer Houghton had a large number of infrastructure projects from MTU’s campus to the city campground. With a number of projects finishing after the fiscal year, the city anticipated the possibility of this issue arising. As they have had previous experience in similar circumstances.