Clinton audit notes strong position
A recent fiscal audit shows the city of Clinton’s financial status to be overall strong, with some concerns.
Gary Mitchell, audit officer with Pugh CPAs, gave the report to the City Council at its Feb. 23 meeting. He said the audit includes the city and Clinton City Schools but not Clinton Utilities Board.
“You still have a very healthy fund balance, a very healthy reserve that enables you all to tackle any kind of projects that come up in the future,” he said.
The debt, he said, is also in good shape.
“You all are on track to virtually pay off all of your debt during fiscal year 2026,” he said. “You only have one very small loan outstanding after that. So, you have a lot of financial flexibility. So, I’d say that the status of the city is very strong.”
The main issue he said the City Council should monitor is the city’s self-insurance fund from 2025.
The city uses the fund to cover health insurance costs.
Mitchell said the fund ended the year with a deficit of about $260,000, mainly due to claims and claims liabilities being higher than anticipated.
He said the city should keep claims in check and make sure it is charging adequate premiums to properly fund the self-insurance program.
The city’s assets went up by about $6 million in 2025 compared to 2024, he said.
“The vast majority of that has to do with some of the big projects you all had going on, the streetscapes and the Jaycee Park,” he said.
He described the city as “kind of flat” between the two fiscal years in terms of liabilities, with some increase.
“You all are paying down your debt,” he said. “I know you’re very aware of that fact.”
He said, however, that the same construction projects that raised the value of assets had kept liabilities flat, balancing out any debt payments.
The city’s equity, he said, went up by about $4 million for the year. Of that, $2 million was unrestricted. About $3 million went to net capital assets.
The city’s total revenue was $30 million, about $1 million more than 2024.
He said the increase was largely due to capital grants for capital projects in the current year.
Total expenses were $26.7 million, which he said were also about $1 million more than the previous year “but essentially fairly flat.”
“The result is a very healthy $4.7 million increase in net position for the current year,” Mitchell said.
“So overall good results for the city and the schools combined,” he said.
The ending unassigned fund balance, he said, was about $7 million, down about $1.5 million for the prior year, but still represents about 39% of typical expenditures in a year.
“So you’re looking at about four months or so there,” he said. “So that’s still a healthy fund balance that you all have to work with.” About two months is recommended.
The only audit finding, he said was that the general fund level exceeded expenditures, which he said went against the city’s charter. The drug fund, he said, also exceeded its budget by less than $5,000, which the comptroller’s office also required to be written up as a budget finding.
“Our recommendation is just that management needs to closely monitor expenses compared to budget on a regular basis, and ... bring you all timely amendments as necessary in making sure you stay in budget by the end of the year.”
